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Building Societies Report Drop In Mortgage Lending

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Building societies report drop in mortgage lending

Lending levels starting to stabilise but are still 60 per cent lower than 12 months ago

Mortgage lending by building societies fell slightly in April and was 60 per cent lower than last year, according to new figures from the Building Societies Association (BSA).

Mutuals lent £1,551 million in April 2009, compared to £1,571 million in March – and £3,921 million in April 2008.

Paul Broadhead, head of mortgage policy at the BSA, said: “The rate of decline in activity in the housing market may have started to slow, but overall the lending environment remains very challenging.â€

http://www.timesonline.co.uk/tol/money/pro...icle6413977.ece

As Darling you to say "got to get the lenders lending again" ........

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I guess the tame Gov banks are making up the shortfall.

I note the size of the average advance is still falling, so this could get very messy once the cash buyers dry up.

+1 that does make sense

I was chatting to a staffer in a bank in Tunisia and he told me he is loosing customers to the government owned banks since they "always say yes" and houses have been unaffordable for ordinary folk since 2004.

I know its not the UK but Tunisia had all the things in place for years what we have in place now so its a good example of how to control banking what I scoffed at when i arrived is now the case back home.

Moral Hazard

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but but but approvals are 1000 higher at 42k....

I guess the tame Gov banks are making up the shortfall.

I note the size of the average advance is still falling, so this could get very messy once the cash buyers dry up.

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http://www.timesonline.co.uk/tol/money/pro...icle6413977.ece

As Darling you to say "got to get the lenders lending again" ........

Yes I read this this morning:

Latest Property And Finance News

UK house prices continue falling as actual house sales crash by sixty percent

UK house prices (actual sold values) continued falling according to the latest statistical release from Land Registry published this morning which records the actual prices achieved...

Although these figures can lag by up to six months; the period covered is in fact November to February, the most startling revelation is the severe drop in sales transactions. Nationally there was a sixty percent fall in sales, in February the number of transactions slumped to just 25,592, half of the 51,121 recorded in February 2008. In London 2,933 properties changed hands compared with 7,152 last year, a fall of circa 65%.

The mainstream media will generate plenty of opinion today suggesting a 'bottom' of sorts has been reached by the housing market. With transaction numbers at lows not seen since the seventies and mortgage lending 60% down year on year this would be a premature assumption when mortgage lending and sales transactions suggest an undeniable fact; the housing market is in fact dead...

If its 60% from last year what is from 2007?

Saving balances held by building societies increased in April by £80 million, compared to £2,918 million in April last year. Societies experienced a net withdrawal of £811 million in April this year, compared to a net inflow of £1,823 million in April last year.

Brian Morris, head of savings policy at the BSA, said: “In the current low interest rate environment households are looking to repay debt rather than save.

What does that mean, does anyone know what they increased £80 million from ? And compared to what last year, was that an increase of £2918 last year? And was that £811 million being withdrawn in April before or after the £80 million going in? It doesn't sound good does it, does anyone have the figures and %'s so we can all see what this means exactly re money available given that that the market is already down £200bn due to the rmbs market being closed.

Edited by Sybil13

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Net lending by building societies in April 2009 was -£722 million (negative)

Building societies had a net withdrawal of £811 million in April 2009

they seem in a pretty bad way

I don't get the big rise in B/S mortgage approvals over the last two months when lending is actually negative - does this mean that they have lots of borrowers remortaging away from them

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http://www.timesonline.co.uk/tol/money/pro...icle6413977.ece

As Darling you to say "got to get the lenders lending again" ........

Doesn't really surprise me... building socs are caught between a rock and a hard place currently so their deals are not flavour of the month... also I wonder how they have factored out the failures/mergers.... the whole sectors down sure, but within that whats the experience of those societies that remain... just taking a bulk figure is odd.

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Building society statistics April 2009

Building society gross lending amounted to £1,551 million in April 2009 compared to £3,921 million in April 2008.

Mortgage approvals in April 2009 were £1,599 million compared to £3,357 million in April 2008.

OK if everyone is saying things are picking up, that nobody was going to EA's last year so a freeze has to evetually start to thaw so how come approvals and lending is more than halved ? If the market fell 17% ish last year with lending more than double then how can the market not keep falling?

I read today that CML said about the BOE figures:

activity remains at extremely low levels on any historic comparison – and weaker than at any point in the early 1990s. Limited lending capacity and the impact of further job losses are likely to act as a ceiling for how far the improvement can continue, although there could be further modest rises in the coming months."

Which seems to confirm that everyone keeps saying about how can approvals double when there is £200bn + gone from the mortgage market? What is more the figures below seem to confirm that the deposits that lenders are now reliant on are dwindling too.

Net lending by building societies in April 2009 was -£722 million compared to £704 million in April 2008.

OK so how can net lending be a MINUS?

Building societies had a net withdrawal of £811 million in April 2009 compared to net receipts of £1,823 million in April 2008. [

So what are they trying to tell us here? That last yaer people put £1823 million in bs's but this yaer they withdrew £811 m instead?

Including interest credited, savings balances held by building societies increased by £80 million in April 2009, compared to £2,918 million in April 2008.

So are they saying that last April £2918 million was deposited but at a time that lenders have a shortfall of £200bn due to the RMBS market being closed and now need deposits in order to lend on £80m was deposited in April 2009? That is not good is it when £811m was withdrawn in April alone. No wonder the BSA keep speaking about mortgage funding "drying up evaporating" . And little wonder that the BOE and CML have said "the green shoots have no roots."

Building societies had a net receipt of £201 million from Cash ISAs in April 2009, compared to net receipts of £2,052 million in April 2008.

Ok a bit more coming in but considerably lower than last yaer.

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Yes cash buyers are now taking equity out of the property market with no loss to the goverment or the lenders. ;)

not just cash buyers also those who have been saving for 5 years and have good deposits and now see property they were looking for coming back within reach.

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This needs to be bumped as it is anathema (look it up Estate Agents - and no it's not a snake) to the bull argument.

This spring bounce is almost running out of steam now - just a few more skips of the stone before it sinks below the waves for good.

Cue the fake bulls and their suspiciously short posts. Except Hamish, the Rommel of the forum, but remember that German's fate...

Spelt cue wrong. Damn.

Edited by 29929BlackTuesday

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OK so how can net lending be a MINUS?

Because the amount they lent out was less than the amount that mortgage holders paid back, either through normal monthly repayments, or selling their houses or switching mortgage providers.

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