Building Society lending increased in July

| August 30, 2012 | 0 Comments
Building Society lending increased in July

Building Society lending is increasing as mutuals attract customers from high street banks.

Lending from building societies increased to £3.1 billion last month, a 14 per cent increase from June, according to the Building Societies Association.

Building Societies gained a 24 per cent market share of gross lending in July, an increase of 17 per cent from July 2011, reflecting customers’ dissatisfaction with banks which have faced a series of scandals and IT problems in recent months.

Adrian Coles, director-general of the Building Societies Association, said: “Mutuals are currently enjoying a sustained increase in lending activity, and an increase in deposits from savers.

“Lending activity by mutuals has been growing strongly on a year on year basis for some time now, and in July gross lending rose again by a healthy 44%.

“At the same time lending by banks fell by 9% in July.”

Building Societies are lending more on home loans, with the number of mortgage approvals up 32 per cent month-on-month.

In July, mutuals accounted for 26 per cent of all mortgage loans.

New figures from the Bank of England show an overall increase in mortgage approvals in July, following an 18-month low in June.

There were 47,312 approvals for house purchase in July, worth £7.1 billion in total.

In June, just 44,000 loans were approved for house purchases.

The Treasury’s funding for lending scheme, launched earlier this month, is expected to boost the number of mortgages available to prospective home owners.

However Paul Fisher of the Bank of England has warned that the scheme will take time to have a positive effect.

“We don’t expect this to be something that will cure the economy in a few months. It will take a little while to pass through,” he said.

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