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Mutuals’ lending up 20% in first half of 2011

Approvals in the first six months of the year were £10.6 billion, compared to £8.8 billion in the same period last year – a 20% increase. Mortgage approvals by mutuals were £2.1 billion in June, an increase of 12% compared to the £1.9 billion approved in June last year.
Commenting on the figures, Adrian Coles, Director-General of the Building Societies Association, said:
“Despite the evident weakness in the housing market, mutuals continued to strengthen their position with gross lending and approvals up 20% in the first half of the year compared to the first six months of last year. Mutuals continue to perform strongly in tough economic conditions, and are offering highly competitive products tailored to meet the needs of the communities in which they operate.”

Savings balances held with mutuals fell by £94 million in June 2011, compared to an increase of £16 million in June 2010. When the interest credited to accounts is excluded, mutuals had a net withdrawal of £362 million, compared to a net withdrawal of £262 million in June last year.
Mr. Coles said:
“The retail savings market is extremely competitive – made even more so by the launch of NS&I’s index-linked certificates in May.  Deposit takers are finding it difficult to attract savers in the current low interest rate environment. In addition, pressures on household finances such as high inflation and low wage growth are clearly taking their toll on the ability of households to save.  Despite these pressures, retail savings balances held with mutuals increased by over £1bn in the first half of 2011.”

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