Gross mortgage lending by building societies dropped slightly between the third and fourth quarters last year, down from £14.2bn to £13.8bn, according to the latest statistics from the Building Societies Association.
However, in the context of total lending from all mortgage providers, which fell from £55.3bn to £51.1bn over the same period, the building society sector “continued to punch above its weight”, according to the industry’s official body.
Nearly 90,000 new loans were approved in the final three months of the year, while over the year societies approved mortgage loans to over 373,000 homebuyers.
During the whole of 2014, building societies provided 26 per cent of all mortgage lending in the UK, with gross lending of £52.6bn during the year, out of a total of £204.4bn by all mortgage lenders.
The BSA stated that this was well above the industry’s “natural” market share of 19 per cent.
Paul Broadhead, head of mortgage policy at the BSA, said that many societies have benefitted from their individual approach to underwriting, which benefits consumers who do not quite fit the borrower profile of mass-market automated lenders, or for those who are looking for self-build or family guarantee style mortgages.
“Competition will be stiff in 2015, especially now that an increase in the bank base rate this year looks to be out, even to the point of the Bank of England stating that a drop in this rate, whilst unlikely, is a tool that will be used if necessary.”
Mr Broadhead commented that mortgage demand came off the boil at the end of last year.
“Now, uncertainty around the general election and matters further afield, like the fate of Greece and the eurozone may well have a dampening effect, although consumers should take heart from the fact that mortgage availability is good.”
peter.walker@ft.com
