Building societies accounted for over a third (37%) of the growth in the mortgage marketin the second quarter of 2018, The Building Societies Association has found.
In the first six months of this year, 755,000 mortgages were approved across the whole UK market, of which 234,064 (31%) were from a building society.
Even though the overall number of mortgage approvals is similar to 2017, the balance between house purchase and remortgages has changed. Mortgages approved for house purchase are down 4% and remortgages are up by 7%.
Robin Fieth, chief executive of the BSA, said: “All indications suggest that the subdued picture in the mortgage market will persist for some time. Surveyors are consistently reporting fewer newly agreed sales and the average time for a home to sell is rising.
“It is unsurprising that remortgage activity is on the increase. With nine in 10 new mortgages and two-thirds of outstanding mortgage balances on fixed rate, the trend is likely to continue.
“The growth in savings balances is recovering. This may in part be due to savers becoming more risk averse with the flight to cash a safety mechanism.
“This view is supported by the reduction in net sales of alternative asset classes, which at £11bn in the first six months are down by 44% on the first half of 2017. Wages have also risen in line with CPI inflation, giving households a bit more leeway to save.”
Fieth added: “Continued uncertainty around the UK’s withdrawal from Europe and the prospect of global trade wars is almost certainly contributing to the behaviour of borrowers and savers. Another factor now in play is the modest rise in the base rate.
“The response in relation to trackers and fixed rates for existing savers and borrowers is straightforward, the same is not true for variable rates and the pricing of new products.
“Multiple factors have to be taken into consideration when these rates are set, of which the base rate is just one.”