Press release

Lending and savings up despite economic uncertainty

13 February 2017

Building societies provided almost one in three mortgages approved in the final quarter of 2016.  Collectively they approved 109,543 new mortgage loans, up 7% on the same period in 2015.  Consumers saved less in Q4 than they did the previous year but balances still rose by £2.9 billion. 

Lending in 2016 as a whole was higher than in 2015 with mortgage approvals up by 13%.  Consumers had a total of 448,157 mortgages approved by the UK’s 44 building societies, to the value of £65.4 billion. Savings balances increased by £18.5 billion, up 79% on the amount in 2015. 

Commenting, Paul Broadhead, Head of Mortgage Policy at the BSA said

Mortgages:
“Despite the uncertainties facing the UK economy in the wake of the vote to leave the European Union, consumer confidence remained remarkably strong in the final three months of 2016.  This was reflected in the demand for mortgages which was up on 2015. Momentum did, however slow in the second half of the year.  This was not simply due to ‘Referendum’ caution, the Stamp Duty change in April also had a noticeable effect. 

“So far this year employment levels have remained stable and low interest rates are clearly an advantage for home buyers, but the uncertain economic outlook for 2017 may mean home buyers exercise more caution.”

Savings:
“Even with many savings rates across the sector at a multiple of the Bank Base Rate, absolute returns for savers remained low in 2016.  However, consumers still saved hard and balances in building society accounts rose.  Our research* shows that the main reasons people increased their savings was to build up a savings buffer or save for a deposit on a home.

 “In 2017 households will have to contend with higher consumer prices and relatively low growth in wages. This could force some people to use their savings to support current levels of spending putting pressure on their ability to save and reducing retail savings inflows.”

Notes to editors

  1. Contact: Hilary McVitty – hilary.mcvitty@bsa.org.uk / 020 7520 5926
  2. Building society mortgage lending figures can be downloaded here
  3. Building society savings figures can be downloaded here.
  4. Consumers will continue to save for a rainy day and housing

 

 

Lending Quarterly

Gross Lending (£m)

Net Lending (£m)

Approvals (£m)

Approvals (number)

Balances outstanding (£m)

Q4 2015

15,723

4,361

15,262

102,018

266,203

Q4 2016

16,402

4,632

15,553

109,543

284,971

% change

4%

6%

2%

7%

7%

Total Market

61,684

10,307

58,244

360,769

1,324,560

Market share

27%

45%

27%

30%

22%

 

Savings Quarterly

Change in balances (£m)

Balances outstanding (£m)

Q4 2015

5,709

246,607

Q4 2016

2,884

262,199

% change

-49%

6%

Total Market

18,327

1,428,034

Market share

16%

18%

 

Lending Annual

Gross Lending (£m)

Net Lending (£m)

Approvals (£m)

Approvals (number)

Balances outstanding (£m)

2015

57,105

16,200

57,804

395,676

266,203

2016

66,407

21,096

65,444

448,157

284,971

% change

16%

30%

13%

13%

7%

Total Market

245,401

40,389

237,783

1,467,378

1,324,560

Market share

27%

52%

28%

31%

22%

 

Savings Annual

Change in balances (£m)

Balances outstanding (£m)

2015

10,388

246,607

2016

18,547

262,199

% change

79%

6%

Total Market

245,401

1,428,034

Market share

8%

18%