Press release

Building societies trade strongly in tougher market conditions

Released today, lending and savings figures from the BSA for 2017 show that building societies approved 29% of all new mortgages in 2017, and savers deposited £8.5 billion in building society accounts.

Building society mortgage lending 2017

  • Approved 442,996 new mortgage loans, down 1% on the 448,222 mortgage loans approved in 2016.
  • Gross lending was £64.1 billion, down 3% on the £66.4 billion lent in 2016.
  • Hold outstanding mortgage balances of £298.7 billion, a 22% market share.

Building society savings balances 2017

  • Savings balances rose by £8.5 billion, down 54% on the £18.6 billion increase in 2016.
  • Savings balances across the whole market increased by £45.9 billion, giving building societies a 19% share of new savings deposits.
  • Building societies hold savings balances of £268.8 billion, 18% of the total market.

Commenting Robin Fieth, Chief Executive at the BSA said: “Consumer confidence fell during 2017 and is now subdued, this is unlikely to change until there is more clarity around the UK’s future relationship with the EU. This uncertainty may put some homebuyers off buying in the near term. However, the labour market is robust and unemployment remains low as do interest rates, so the wider economic environment will support the mortgage market to some extent.

“In addition to highly competitive mainstream mortgage products, the sector’s niche lending is what supports a diverse mortgage market. Building societies are the obvious choice for the increasing number of people who require a mortgage that will run into retirement, who want to build their own home or have other more complex borrowing needs.

“The UK savings market had a challenging year with savings balances rising by around half 2016 levels. The fall in savings growth in 2017 corresponds with a significant flow of money into other retail investment products. This suggests that savers have been chasing higher returns in riskier markets. Households have also been dealing with consumer prices rising faster than wages, making it more difficult to save. In last year’s tougher conditions building societies traded strongly.

“Looking ahead, inflation now appears to have peaked, and wages should pick up in the coming year supporting savings. If confidence in equity markets begins to fall after the recent market correction, a larger than expected amount could flow back into cash savings.”

Contacts
Hilary McVitty
hilary.mcvitty@bsa.org.uk
Tel: 020 7520 5926 /07507 837 326

Amy Harland
amy.harland@bsa.org.uk
Tel: 020 7520 5927

Notes to editors

Download building society mortgage lending figures here.
Download building society savings figures here.

Mortgage lending Q4 2017

  •  Building societies approved 102,709 loans in Q4 2017 compared to 109,608 in Q4 2016.
  • Building societies’ gross mortgage lending was £15.6 billion in Q4 2017, 5% lower than £16.4 billion in Q4 2016.

Savings balances Q4 2017

  • Savings balances held with building societies increased by £2.9 billion in Q4 2017 (a 21% share), the same as in Q4 2016.

Lending

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Savings

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