Mortgage lending in the first quarter of the year (January – March 2016):
- Building societies approved 109,600 mortgage loans, a 32% share of the 347,000 mortgage loans approved across the market in the period.
- Gross mortgage lending by building societies was £17.7 billion, accounting for 28% of the £62.5 billion total mortgage lending in the UK during the period.
- Net mortgage lending by building societies (gross lending minus repayments) was £6.1 billion, a 48% share of total net lending across the market of £12.7 billion.
- This leaves building societies with outstanding mortgage balances of £272.3 billion at the end of March 2016, a 21% market share.
Building society mortgage lending figures can be downloaded here
Household savings in the first quarter of the year (January – March 2016):
- Savings balances at building societies increased by £4.3 billion, a 23% share of the £19.0 billion across the market.
- Savings balances outstanding at building societies now stand at £250.2 billion, an 18% market share of the total £1,365.4 billion across the market.
Building society savings figures can be downloaded here
Commenting on the figures, Paul Broadhead, Head of Mortgage Policy at the BSA said:
Building societies performed strongly in both the mortgage and savings market in the first quarter of the year despite intensive competition from the big 5 banks and smaller challengers.
In the mortgage market, lending across the market was 40% higher in the first quarter of the year compared to the first quarter last year, fuelled by a surge in purchases ahead of the introduction of additional Stamp Duty on second homes in April.
Building societies hold 21% of outstanding mortgages in the UK, yet approved 32% of all mortgage loans and accounted for nearly half (48%) of net lending in the first quarter of the year. This was achieved by offering market leading rates whilst maintaining high levels of customer service. The average mortgage rate offered by building societies in the period was 2.88%, lower than the market average of 2.94%*.
New savings deposits were remarkably high in the first quarter of the year, increasing by £19 billion across the market, and with the bulk of this inflow occurring during March. This compared to an increase of £12 billion in the first quarter last year.
Whilst it is not currently possible to explain the reason for this significant inflow, it does correlate with the surge in property transactions during March. It is therefore possible that some property sales were pushed through before the increase in Stamp Duty on second homes, with sellers opting to deposit the cash from their sale rather than delaying the process by looking for a property to purchase, which could have put the transaction at risk of falling through. Much of the additional increase in savings seen in March could be withdrawn over coming months as people withdraw this money to fund property purchases. The BSA will be monitoring the situation over the coming months.
Building societies took a 23% share (£4 billion) of the £19 billion increase in household savings in the period. This continues the trend of building societies taking a high share of new household savings, achieved by offering competitive savings rates to both new and existing customers.
*Source: Moneyfacts Analyser
The Building Societies Association (BSA) represents all 44 UK building societies. Building societies have total assets of over £345 billion and, together with their subsidiaries, hold residential mortgages of over £270 billion, 21% of the total outstanding in the UK. They hold over £250 billion of retail deposits, accounting for 18% of all such deposits in the UK. Building societies account for about 31% of all cash ISA balances. They employ approximately 40,000 full and part-time staff and operate through approximately 1,550 branches.