Press release

Pressures in the economy challenge homebuyers and savers

14 August 2017

Developments in the wider economy are making it more challenging for homebuyers and savers. Building societies continue to support both groups, and maintained a high market share of new mortgage lending and savings in the second quarter of 2017.

Mortgage lending Q2 

  • Building societies approved 112,340 new mortgage loans.  Down 5% on the 118,637 mortgage loans approved in Q2 2016, and broadly the same as Q1 2017 (112,286).
  • There were 383,980 new mortgages approvals across the market in Q2, giving building societies a market-share of 29%. 
  • Gross lending by building societies was £16.1bn, up 1% on the £15.9bn lent in Q2 2016, and up 6% on Q1 2017 (£15.1bn).
  • Total market gross lending was £61.9bn, giving building societies a market-share of 26%. 
  • Building societies were responsible for 30% of the growth in the mortgage market, contributing £3.3bn net lending out of the total £11.2bn across the market.
  • Building societies hold outstanding mortgage balances of £292bn, a 22% market-share.

Savings balances Q2 2017

  • Savings balances with building societies increased by £3.3bn, down 51% on the £6.8bn rise in the same period in 2016, but up substantially on Q1 2017 (£1.0bn).
  • Savings balances across the market increased by £14.0bn, giving building societies a 24% market-share; banks took 65% and NS&I 11%.
  • Building societies hold savings balances of £265bn, an 18% share of the £1,449bn across the market.

Commenting Joseph Thompson, Business Economist at the BSA said:

“It is a challenging market for those looking to buy a home. Choice is limited as the number of properties coming on to on the market has fallen, and the contribution from new-build is still too low.  At the same time, house-prices have been rising faster than earnings putting additional financial pressure on homebuyers.  These challenges can be seen in lower numbers of mortgage approvals.  As none of these factors is likely to change this year, the number of property transactions is likely to remain relatively weak. Many homebuyers, especially those with a more complicated financial situation, prefer dealing with a building society as they can take a more personal approach to lending.” 

“Challenges in the wider economy are making it difficult for households to save. Consumer prices are rising faster than average earnings, so people are using their savings to maintain spending levels. The pressures on households are likely to persist over the rest of the year, so savings balances are expected to increase at a slower pace than we saw in 2016.”

Notes to Editors

Building society mortgage lending figures - download here

Building society savings figures - download here