Lending balances at mutuals continue to grow in August

Gross mortgage lending by building societies and other mutual lenders was £3.0 billion in August which is up by 40% compared to the same month last year.

Mutuals took a 23% market share of gross lending in August, up from 16% in August 2011, and took 21% share of lending in the first eight months of the year.

Retail savings balances at mutuals rose by £1,158 million in August 2012, compared to an increase of £393 million in the same month last year. After interest credited is removed there was a net receipt of £418 million in August.

Commenting, Adrian Coles, Director-General of the Building Societies Association, said: “Lending by mutuals grew substantially in August compared to the same month last year which continues the trend of increased levels of lending activity by mutuals over the year so far. Lending by banks however fell by 13% in August, which follows a 9% reduction in July. Consequently mutuals continue to increase their market share, which was 23% in August, and well above the 16% in August last year.

“These figures show that mutuals are committed to lending to homebuyers, and of the initial 13 firms signed up to the Bank of England’s Funding for Lending Scheme, six are building societies. We expect more building societies to sign up in coming months, though it will take some time for the funds drawn from the scheme to feed into new lending.
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