In contrast bank net mortgage lending grew just 0.9 per cent in the year to June.
Mortgage approvals by mutuals were up 45% in the first six months of the year compared to the same period in 2011. In June, approvals were up by 35% compared to the same month last year and were 20% higher than the average over the previous six months.
Retail savings balances at mutuals increased by £639 million in June 2012, compared to a net withdrawal of £94 million in the same month last year. After interest credited is removed there was a net receipt of £378 million.
Commenting, Paul Broadhead, Head of Mortgage policy at the Building Societies Association, said:
“In the first half of the year, lending by building societies and other mutuals grew by 38%. Lending by mutuals has grown in each month of 2012 on a year on year basis, and the June figures for mortgage approvals are above the previous six months’ average. This means that lending by mutuals looks likely to continue to be strong in coming months. Growth in lending by banks over the past six months has been relatively weak while the economy remains in recession. In contrast, mutuals have demonstrated their commitment to lend, and are currently offering some of the best rates available in the market.”
“It is encouraging that savings balances at mutuals increased in June, and this was a significant improvement compared to the same month last year. However, the low interest rate environment continues to make it challenging for households to save, especially when wage growth has been subdued for quite some time. At its July meeting, the Monetary Policy Committee considered a reduction in the Bank Rate. Such a cut would be a further blow to hard-hit savers and, with rates already so close to zero, we judge it would anyway have little impact on demand in the economy.”
Have your say on this story using the comment section below