Building societies lent £15.8bn in Q2, contributing 82% in growth of the mortgage market, latest research by the Building Societies Association reveals.
Across the market, 393,400 new mortgages were approved, giving building societies a market share of 30%.
Andrew Gall, chief economist at the BSA, said: “Building societies remain popular with consumers, performing strongly in both the mortgage and savings market in the second quarter of the year.
“They were the main driver of growth in the mortgage market, accounting for 82% of net lending. It remains too early to tell how confidence in the housing market will be affected by the decision to leave the EU, but it remains business as usual for building societies.”
Gross lending by building societies in Q2 was up by 16% compared to the same period in 2015, reaching £15.9bn.
Building societies approved 118,600 new mortgage loans between April and June, up from the 109,800 mortgage loans approved in the first three months of the year, and up from 98,300 in Q2 2015.
Total gross lending for the whole of the market in Q2 were £57.1bn, with building societies’ market share remaining stable at 28% – the same as in Q1.
Gall added: “Mortgage rates are already falling following the actions taken by the Bank of England earlier this month. Even before this, building societies offered excellent value to borrowers with an average mortgage rate of 2.75% in July compared to the market average of 2.93%.
“New savings deposits at building societies increased significantly in the second quarter of the year rising by more than twice the same period last year. Cash savings balances were up across the market as a whole perhaps relating to the equity market volatility in the first half of the year, reflecting concerns in emerging markets and the outcome of the EU referendum.
“Some investors may have moved their money into cash savings for security. During this period of uncertainty households are expected to continue to save despite low savings rates. However, if inflation picks up by more than expected, savers may be forced to reduce their savings to maintain spending.”
Established in 1869, the BSA is the industry body for building societies and other mutual financial service providers.