Building societies take market share from banks

The BSA statistics show an increase in retail savings balances, which rose by a total of £6.7bn in 2013 compared to a £2.2bn increase between January and November 2012.

The figures reveal total retail deposits of £225bn accounted for 19 per cent of balances in the country.

Lending was also strong, especially in the mortgage market. According to the figures, the gross lending market share in the first 11 months of 2013 was up at 23 per cent, a 2 per cent rise on the same period in the previous year.

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The figures show that building societies lent £3.6bn in that period, an increase of 33 per cent compared to £2.7bn in November 2012.

Nationwide topped the table of group assets, with total assets of £190.7m, which is more than five times as much as Yorkshire Building Society in second place with £34.5m. Coventry, Skipton and Leeds took up the other places in the top five.

Building societies have 18 per cent of total residential mortgage balances in the UK, including subsidiaries. Approximately one in three new loans from mutuals were made to first-time buyers, amounting to 78,300 loans of which 29 per cent were made to borrowers with a deposit of 10 per cent or less.

However, a study published by management consultancy Transform has said that the UK’s building societies are delivering an online customer experience that fails to keep up with the demands of today’s consumers, with lower interest rates and fewer technological advances.


Trystan Lewis, director of Chester-based Griffin Wealth Management, said: “It is good that the financial strength of building societies has improved, but it is a shame that anyone who saves with them suffers from such poor interest rates.

“We do rely on the strength of banks and building societies for the economy to work, and when they didnt we saw the downturn, so this is further evidence that the economy is improving. Let’s hope they don’t make any mistakes.”