Released today, figures from the BSA show that mortgage lending by building societies in the third quarter of the year was up 11% compared to Q2 despite the worsening outlook for the economy, and squeeze on household incomes.
Released today, figures from the BSA show that mortgage lending by building societies in the third quarter of the year was up 11% compared to Q2 despite the worsening outlook for the economy, and squeeze on household incomes. The number of approvals were however down 9%. Gross lending was also up by a fifth compared to the same period last year (Q3 2021), when the Stamp Duty holiday was in operation, although the number approvals were a little lower.
Savings balances increased by double the amount in the same period last year as households increase their precautionary savings to act as a buffer in the wake of increased economic uncertainty. There are however many households who are unable to save, and will face growing financial pressures in coming months.
“Gross lending by building societies remained strong throughout the third quarter, with the sector maintaining its share of the mortgage market at just under a quarter of total outstanding balances. Despite several Bank Rate rises in the first nine months of the year, the lending figures show the resilience of the housing market during this time. However, the drop in mortgage approvals suggests that the uncertain economic outlook and challenging environment for household finances will lead to more subdued lending in the coming months.
“Although arrears rates have remained low, societies are sensitive to the rising number of people facing a squeezed household budget. Anyone concerned about their ability to pay their mortgage should therefore get in touch with their lender or a debt adviser as soon as possible. They will provide a safe space for a confidential, non-judgmental chat and will do everything possible to help each borrower with options based on their own personal circumstances.
“The significant growth in savings balances during the period suggests that those who are able to are building their savings buffers, while rising interest rates and turbulence in other investment asset classes make cash savings attractive. Building societies attracted 38% of the increase in balances in the third quarter of 2022, reflecting some competitive rates on offer from societies.”
Download building society mortgage lending figures here
Download building society savings figures here
Notes to Editors
The Building Societies Association (BSA) represents all 43 UK building societies, as well as 7 credit unions. Building societies have total assets of nearly £500 billion and, together with their subsidiaries, hold residential mortgages over £366 billion, 23% of the total outstanding in the UK. They hold over £342 billion of retail deposits, accounting for 18% of all such deposits in the UK. Building societies account for 41% of all cash ISA balances. They employ approximately 51,500 full and part-time staff and operate through approximately 1,288 branches.