Gross mortgage lending by building societies and other mutual lenders was Â£4.0 billion in July, up 30 per cent on July last year, and the highest monthly figure since data was first published for the mutual sector at the start of 2010. The value of mortgage approvals in July also hit the highest level since 2010 at Â£4.2 billion compared to Â£2.8 billion in July last year.
In the first seven months of the year gross lending by the sector was Â£22.2 billion, up by 30 per cent compared to Â£17.1 billion in the same period last year. This gives mutuals a 24 per cent market share of gross lending in the year to July, up from 21 per cent in the same period in 2012.
Lending to first time buyers has accounted for around 30 per cent of lending by mutuals since the start of the year, with more than a quarter of that to first time buyers with a deposit of ten per cent or less.
Net new mortgage lending (gross lending minus repayments) by mutuals was Â£1.3 billion in July and Â£6.8 billion in the first seven months of the year which is greater than the total net lending by the sector across the whole of 2012.
Retail savings balances at mutuals rose by Â£0.7 billion in July and by Â£5.7 billion in the first seven months of the year. In the first seven months of 2012 balances at mutuals rose by just Â£0.8 billion.
Commenting, Brian Morris, Head of Savings Policy at the BSA said,
“The figures for July confirm that the mutual sector continues to perform strongly in both of its core markets, mortgage lending and retail savings.
“In the mortgage market, net lending by the sector was Â£6.8 billion in the seven months to July, whilst net lending by other institutions, such as banks, has been in negative territory. Mutuals are increasing their lending to the real economy, helping to boost economic activity in the UK.
“First-time buyers, and in particular those with smaller deposits are being actively supported by mutuals. In the first seven months of the year over a quarter of lending by mutuals to first time buyers was to those with a deposit of ten per cent or less.
“Building societies and other mutual deposit takers have seen savings balances grow strongly in the first seven months of the year. This has been against a background of downward pressure on savings interest rates due to the Bank of England’s Funding for Lending Scheme and the continued low level of the Bank Rate. Mutuals continue to offer a range of competitive products, and currently around a third of products in the best buy tables are offered by mutuals*.”