Building society lending increases

Building society lending increases

Gross mortgage lending by building societies and other mutuals has increased 40% year-on-year to £3 billion in August.

Mutuals had a 23% share of the market compared to 16% in August 2011.

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.”

Out of the 13 firms signed up so far to the Bank of England’s Funding for Lending scheme, six are building societies. Mr Coles expects many more to sign up in coming months.

The lean towards building societies continues with lending by banks falling by 13% in August, following a 9% reduction in July.

Mr Coles added: "Savings balances at mutuals increased by over £1 billion in August for a second consecutive month, and were up significantly compared to August last year.

“With consumer price inflation on a downwards trend, the pressure on household finances eased somewhat allowing more money to be saved.

“The changes in deposits may also reflect consumers switching their accounts over to mutuals over the past two months as people opt for better service and a more ethical way of banking."

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