Mutuals’ gross lending and savings continue to strengthen

Lending:
 
• 6% rise in gross mortgage lending by mutuals in July, up to £2.1 billion from £2.0 billion in July 2010. 
• 17% increase in gross lending for the first seven months of 2011 standing at £12.3 billion (£10.5 billion, January – July 2010).
• £1.9 billion of mortgages approved by mutuals in July, on a par with July 2010.
• 16% rise in mortgage approvals for the first seven months of 2011 at £12.5 billion (£10.8 billion, January – July 2010).
 
Savings:
 
• Savings balances up £0.6 billion in July 2011, compared to a reduction of £1.0 billion in July 2010 last year.
• Excluding interest credited to accounts, mutuals saw a net receipt of £0.4 billion, compared to a net withdrawal of £1.3 billion at the same time in 2010.
 
Commenting, Adrian Coles, Director-General of the Building Societies Association, said:
 
“Lending by mutuals is showing continued signs of strength in a relatively difficult operating environment. Gross lending by mutuals in July was at its highest level since September 2010, and in the first seven months of the year mutuals have approved an additional 16% worth of mortgages compared to the same period last year. This is an encouraging trend in the face of continued uncertainty in the outlook for the housing market given the challenges faced in the wider economy.”
 
 “Similarly it is encouraging to see a net receipt of savings by mutuals in July, especially when the ability of many households to save is being eroded by persistently high inflation and low wage growth. A recent deterioration in labour market conditions has added to the pressure for many households, and may further dampen consumer confidence. Consequently, total household savings in 2011 are likely to be significantly lower than last year.  Mutuals, however, may benefit from any consumer withdrawal from equity investments as a consequence of current share-price volatility.”

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