Society lending up by 67 per cent

Robyn Hall

March 29, 2010

Gross lending was £1,174 million in February, a 13% increase on the £1,039 million in January.

Commenting, Adrian Coles, BSA director-general, said: “The housing market is making small steps to a recovery, but lending figures are still subdued in comparison to previous years. Approvals and gross lending did improve in February, but January was a particularly sluggish month due to the poor weather conditions, and a surge of completions in December as the stamp duty holiday was coming to an end.”

Balances held in savings accounts at mutual institutions increased by £807 million in February compared to reduction in balances of £467 million in January. After interest credited to accounts is excluded, mutuals had a net receipt of £623 million February.

Coles continued: “It is encouraging to see the mutual sector attract a net inflow of retail deposits in February, ending a run of 11 monthly net withdrawals.

“However, attracting funds in the retail market remains challenging, although we look forward to more normalised market conditions with the removal of the 100% deposit guarantee of Northern Rock. It’s too early to tell whether the inflow that mutuals received from savers this month is a one-off or if it represents a reversal of the recent trend of outflows.”

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