Another rise in mortgage lending by mutuals

Gross mortgage lending by building societies and other mutual lenders was £3.2billion in April, up by 55% compared to £2.1billion in the same month last year.

Mutuals took a 26% market share of gross lending in April, up from 21% in April 2012. In the year to April, gross lending by mutuals was £11billion, up 28% on the same period in 2012.

Net new mortgage lending (gross lending minus repayments) by mutuals was £0.9billion in April, up from £0.2billion in the same month last year. In the first four months of the year mortgage balances at mutuals have increased by £2.8billion while balances at other lenders have fallen by £3.1billion.

Building societies and other mutual lenders approved a total of 30,651 mortgages in April, up 30% compared to the 23,617 in the same month last year.

Retail savings balances at mutuals rose by £1.5billion in April.  In the same month last year balances grew by just £0.1billion. In the first four months of the year balances have increased by £2.6billion (net) compared to a reduction of £1.4billion in the same period last year.

Adrian Coles, Director-General of the Building Societies Association, said: “Gross lending by building societies and other mutuals was up markedly in April – by 55% compared to the same month last year and by 28% in the first four months of the year. One reason for the substantial rise this month particularly is that 31 March 2012 marked the end of the stamp duty holiday for first time buyers. This generated a lull in activity in April 2012. Following last year’s trend, mutual lenders are still delivering the majority of additional lending into the market as other providers have continued to de-leverage their balance sheets.

“Despite the downward pressure on savings rates from the Funding for Lending scheme, building societies and other mutuals experienced strong inflows into savings accounts in April, building on a strong March performance.  This, coupled with some recent retail sales data seems to indicate that many consumers are currently choosing saving over spending. Given the mixed bag of factors affecting the savings market, including interest rates, consumer prices and wages it is unclear if the strong savings inflows will continue for the duration of the year.”

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