Building societies and mutuals continued to see positive growth in the UK mortgage market with net lending of £1.4 billion in October, compared to net lending for all other lenders which was at £0.7 billion.
Gross lending was up 32 per cent to £4 billion compared to 3 billion in October 2012 and market share was 24 per cent for the first ten months of the year, compared to 22 per cent for the same period last year.
Around one in three new loans from mutuals in the ten months to October were made to first time buyers (70,400 loans) of which 29 per cent were made to borrowers with a deposit of 10 per cent or less.
Commenting on performance and changes announced by Mark Carney, governor of the bank of England, Paul Broadhead, head of mortgage policy at the Building Societies Association said:
“Building societies and other mutual lenders remain the main driving force behind growth in the UK mortgage market. Building societies are not addicted to the Funding for Lending Scheme and it is unlikely that this change in isolation will have a significant impact on the availability of mortgage finance, although it could have some effect on interest rates next year.
“The Bank of England’s remarks that housing transactions remain low relative to historic levels and that underwriting standards have improved since the crisis provides helpful context to the current environment. It is clearly necessary for The Bank to have a range of tools in its kit to manage financial stability. However, we believe that neither loan-to-value nor loan-to-income limits are appropriate. The deployment of such direct consumer related macro-prudential tools would be a fine judgment call with caution and pre-consultation called for.
“Savings balances at mutuals increased marginally in October, but are up significantly in the first ten months of the year compared to the same period in 2012. It is encouraging to see a pickup in household savings this year, and the reduction in CPI inflation to 2.2% in October should ease the pressure on consumers somewhat. However, the low interest rate environment continues to make it a challenging time for savers and we hope that the Chancellor will adopt the savings measures proposed by the BSA in his Autumn Statement next week”.
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