Gross mortgage lending by building societies and other mutual lenders was £3.5 billion in June and £18.0 billion in the first half of the year, up by 28% compared to £14.0 billion in the first half of 2012.
The Building Societies Association (BSA) said this gives mutuals a 24% market share of gross lending in the first half of 2013, up from 21% in the first half of 2012.
Net new mortgage lending (gross lending minus repayments) by mutuals was £1.4 billion in June and £5.5 billion in the first half of the year, up from £2.6 billion in the first half of 2012.
Building societies and other mutual lenders approved a total of 165,800 mortgages in the first half of the year, up 17% compared to the 141,200 in the same period last year.
Retail savings balances at mutuals rose by £1.2 billion in June, and by £4.9 billion in the first half of the year. In the first half of last year balances at mutuals fell by £0.5 billion.
Brian Morris, head of savings policy at the BSA, said: “Building societies and other mutual lenders have performed strongly in the mortgage market during the first half of the year, with net lending of £5.5 billion more than double the amount they lent in the same period last year. In contrast lending by other institutions, such as banks, was negative in the first half of 2013 at minus £3.0 billion as mortgage repayments outstripped new lending by those institutions.
Mutuals have increased their lending across the spectrum to all types of borrowers including first time buyers and those with small deposits. In fact lending to first time buyers accounted for almost a third of all lending by the sector in the year to June, helping 38,000 people take the first step on to the property ladder. This has been achieved ahead of the launch of the Government’s Help to Buy: Mortgage Guarantee Scheme, demonstrating that mortgage finance for those with lower deposits is already available at a building society.
“In the continuing low interest rate environment, building societies and other mutuals endeavour to continue to offer value to their customers. This has been reflected in strong inflows into savings accounts in the year to June, which contrasts with the outflow seen in the same period last year. Nonetheless, economic conditions remain challenging for savers, with average wage growth running well behind increases in consumer prices which rose 2.9 per cent in the year to June. It is therefore not clear how long this savings trend can be sustained.”
