BSA: Mutuals account for 21% of gross lending

Building societies and other mutual lenders made £2.7bn of mortgage loans in November 2012, up 9 per cent compared to November 2011, data from the Building Societies Association has revealed.

This means that mutual lenders accounted for 21 per cent of gross mortgage lending in the UK in November 2012.

In the first eleven months of 2012, mutuals lent £28.3bn of mortgages (gross), accounting for 22 per cent of the whole market. In this period, mutual lenders made over 61,000 loans to first-time buyers, up from 36,000 loans in the same period in 2011.

Net mortgage lending by mutuals, in other words gross lending minus repayments, was £600m in November 2012. In the first eleven months of 2012 net lending by mutuals amounted to £6.2bn, out of £7.2bn across the market as a whole over this period.

Looking ahead to future completions, mutuals approved 24,800 new mortgage loans in November 2012, 19 per cent higher than the 20,800 loans approved in November 2011.

Retail savings balances held with mutuals increased by £700m in November 2012, compared to an increase of £500m in November 2011.

Paul Broadhead, head of mortgage policy at the BSA, said: “Mutual lenders accounted for a greater share of total gross lending in this period than over the equivalent period in 2011, showing that the sector has stepped up to the plate and supported many of those looking to purchase a home.

“Importantly, this new lending has been broadly spread, including many first-time buyers and borrowers with lower levels of deposit.

“Savings balances held with mutuals also increased in November. We will see in coming months whether this is the start of a trend. Historically we often see withdrawals from savings accounts following the festive period as consumers pay off Christmas debts.”