Gross mortgage lending by building societies continues to fall, with new data showing that they lent £12.7bn in the first three months of the year, down by almost 8 per cent when compared to the last quarter of 2014.
Over the last three months of 2014 building societies lent £13.8bn, compared to £14.2bn in July to September, according to the Building Societies Association.
The latest figure of £12.7bn accounts for 29 per cent of all new lending across the market. Societies also approved over 91,000 mortgages in the first quarter, while nearly 90,000 new loans were approved in the last three months of last year.
In the savings market, the effect of NS&I’s Pensioner Bonds was “clear”, the BSA said, causing building societies’ savings balances to fall by £2.2bn in the first quarter.
Last week, FTAdviser reported that more than a million older savers had bought over £13bn of the government’s 65+ pensioner bonds, which recently came off sale, making them the biggest selling retail financial product in Britain’s modern history.
Paul Broadhead, head of mortgage policy at the BSA, said that lending by building societies has been strong. “Without the contribution of this section of the market the stock of mortgage loans across the UK would have shrunk in the first three months of the year.
“Societies hold a 20 per cent share of mortgage balances, but have had a much greater share of the flow of new lending for some time.
He added that the mortgage market share was partly because of competitive products and partly due to the more personal approach taken to underwriting. “The trend looks set to continue in Q2, as around a third of mortgage approvals in Q1 were from building societies.”
donia.o’loughlin@ft.com
