Home » Mortgages » Mortgage lending and approvals rise through March

Mortgage lending and approvals rise through March

Mortgage approvals by mutuals were up 39% in March compared to March last year, and they were up 40% in the first quarter of the year compared to the first quarter of 2011.

Retail savings balances at mutuals fell by £266million in March, compared to an increase of £273million in the same month last year. After interest credited is removed there was a net withdrawal of £945million in March.

Adrian Coles, Director-General of the Building Societies Association, said: "Gross lending and approvals by mutuals were particularly strong not only in March, but the whole of the first quarter, which was well up on the same period in 2011.

"The additional lending in March can, in part, be attributed to the increased number of first-time buyers who took action to get the benefit of the stamp duty concession before it ended on 24 March.

"In all around 6500 mortgage loans were made to first-time buyers by building societies and other mutuals in March, up from 3100 in March last year. Of these about two-thirds are estimated to have benefited from the stamp duty exemption.

"Some purchase decisions are likely to have been brought forward as a result of the deadline so lending to first-time buyers may dip slightly in coming months.

"More broadly, mortgage lending to those moving home or remortgaging was also up strongly. This reflects the attractive mortgages on offer from mutuals with them accounting for more than three-quarters of mortgage best-buys in the quarter.

"Approval figures demonstrate that there is a strong mortgage pipeline, which suggests that mutuals’ mortgage lending will hold up well into the summer.

"Attracting retail savings remains challenging when the Bank Rate remains at such a low level, wage growth stays below the growth in prices and real disposable household income is in falling. In fact, many households are now relying on their savings to supplement their incomes and are not in a position to increase their nest eggs. A fall in savings balances in March was therefore unsurprising."

Have your say on this story using the comment section below