Mutual Gross Lending 'up 36% In March'

New figures from the Building Societies Association (BSA) released today (May 4th)

show that gross lending by mutuals increased by over one-third in March.

According to the research, the home credit lending market saw a 36 per cent month-on-month rise from 1.17 billion in February to 1.59 billion throughout the month. Approvals of requests were also over one-fifth more common in March, with 1.67 billion being granted for mortgages in comparison to 1.38 billion one month earlier. - a 21 per cent rise.

Adrian Coles, director-general at the BSA, said: "Lending activity appears to have gained some momentum following a sluggish start to the year and the relatively strong approval figures bode well for coming months.

"However, the mortgage market will remain fragile as there is uncertainty in relation to employment, interest rates, house price inflation, mortgage availability and, conceivably even after the election, the political outlook."

The increase in balances held in the savings market dipped slightly from 807 million in February to 534 million in March, the research has shown, while if interest credited to accounts is excluded, mutuals had a net withdrawal of 318 million in February.

Mutual providers continue to offer widely competitive savings rates, but a recent trend of debt consolidation or making additional payments on their mortgage following the recession is remaining popular with many investors rather then saving.

The BSA is a trade association that represents UK mutual lenders and deposit takers, including all 51 building societies in the country. It is estimated that deposit takers and mutual lenders have assets totalling around 375 billion, with residential mortgages of almost 240 billion. Mutual deposit takers account for about 36 per cent of cash ISA balances in the UK.

by: Sam Gooch

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