Building societies take 27% of mortgage market

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Building societies take 27% of mortgage market

A total of 103,000 mortgages were approved by building societies between July and September 2015, data released today (24 November) shows.

The Building Societies Association figures suggest that these approvals account for 27 per cent of the total market - significantly higher than the average market share of 21 per cent.

During this period it was recorded that societies advanced £15bn in gross new mortgage lending during this period - the same three months found that net lending (£3.8bn) accounted for a 32 per cent share in the market.

Ray Boulger, senior technical manager at John Charcoal, thinks there are two main reasons why building societies are doing so well.

The first is that people perhaps trust societies more than they trust banks.

He said: “The second reason is probably because building societies are offering more competitive rates than the banks, which makes them more attractive propositions for customers.”

James Carter, principal of Independent James, adds that building societies often offer a more flexible approach to underwriting.

He said: “Some of the larger ones simply have great rates with attractive criteria; Nationwide Building Society and Coventry Building Society both stand out.”

Robin Fieth, chief executive of the BSA, said that it is not just mortgages where building societies are winning market share.

He said: “In the third quarter, the sector attracted over a third of new deposits across the market.

“This is up from 16 per cent in the second quarter when NS&I pensioner bonds were still available, and greater than the sector’s 18 per cent share of outstanding deposits.