Lending and savings up at mutuals in 2011

Gross lending by building societies and other mutuals in 2011 was £23.6 billion which is up 16% compared to 2010 (£20.4 billion), bucking the trend across much of the rest of the m

Related topics:  Mortgages
Millie Dyson
31st January 2012
Mortgages
Gross lending by mutuals in December was £2.1 billion, up 15% compared to December 2010 (£1.8 billion).  

Savings balances at mutuals increased by £4.0 billion in 2011 compared to an increase of £0.2 billion in 2010. Balances held with mutuals increased by £0.3 billion in December, compared to an increase of £1.5 billion in December 2010.  

Lending:

- 16% increase in gross mortgage lending in 2011 at £23.6 billion (£20.4 billion in 2010).

- 15% rise in gross mortgage lending in December, up to £2.1 billion from £1.8 billion in December 2010.

- 19% rise in mortgage approvals in 2011 at £23.1 billion (£19.4 billion, 2010).

- £1.8 billion of mortgages were approved in December, up 49% on December 2010 (£1.2 billion).

Savings:

- In 2011, savings balances held with mutuals have increased by £4.0 billion, compared to an increase in balances of £0.2 billion in 2010.

- Savings balances increased by £0.3 billion in December 2011, compared to an increase of £1.5 billion in December 2010.

- Excluding interest credited to accounts, mutual deposit takers had a net withdrawal of £0.1 billion in 2011, compared to a net withdrawal of £3.7 billion in 2010.

In December 2011, mutual deposit takers had a net withdrawal of £0.1 billion, compared to a net receipt of £1.1 billion in December 2010.

Adrian Coles, Director-General of the Building Societies Association, said:

"Activity in the housing market has been weak throughout 2011 with the number of transactions close to an all time low. New lending by mutuals, however, rose 16% in 2011 compared to 2010, whilst the UK's major banks recorded a small reduction in lending over the same period.

"The housing market faces significant headwinds over the coming 12 months but mutuals are poised to take on these challenges and continue to offer market leading rates and innovative products to home movers and first-time buyers alike."  

"Growth in savings balances at mutuals increased significantly in 2011 compared to previous years although it is clear that savers are still struggling to save as much as they would like, or are choosing to use spare cash to pay down debt instead.

"The fall in the rate of inflation may offer some breathing space to households but if conditions in the labour market continue to deteriorate and wage growth remains low, household finances are likely to remain squeezed for some time to come."

Brian Murphy, head of lending, Mortgage Advice Bureau comments:

“Any increase in lending figures is something to be welcomed and the figures out today reflect our own experience of a stronger final quarter to 2011 – relative to the lower level of transactions being completed.
 
“This year is predicted to be as challenging – if not more so – than last year, but for those buyers with the ability to buy then property purchase looks as attractive as it has done for a while.

"The percentage of income required to serve a mortgage is at an all time low, and as we move into 2012 we have seen an increase in the number of 90%-95% LTV products – especially from building societies – which will help borrowers with smaller deposits."
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