Mutuals increase mortgage lending 40pc

Robyn Hall

October 1, 2012

Mutuals took a 23% market share of gross lending in August, up from 16% in August 2011, and took 21% share of lending in the first eight months of the year.

Retail savings balances at mutuals rose by £1,158m in August 2012, compared to an increase of £393m in the same month last year. After interest credited is removed there was a net receipt of £418m in August.

Adrian Coles, director-general of the Building Societies Association, compared the positive lending figures of the mutuals with the 13% decrease in lending by the banks which followed a 9% reduction in July.

He said: “These figures show that mutuals are committed to lending to homebuyers and of the initial 13 firms signed up to the Bank of England’s Funding for Lending Scheme six are building societies.

“We expect more building societies to sign up in coming months though it will take some time for the funds drawn from the scheme to feed into new lending.”

And he added: “With consumer price inflation on a downwards trend the pressure on household finances eased somewhat allowing more money to be saved.

“The changes in deposits may also reflect consumers switching their accounts over to mutuals over the past two months as people opt for better service and a more ethical way of banking.”

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