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Ash4781

Bsa: Building Society Lending Shows Signs Of Stabilising

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http://www.bsa.org.uk/mediacentre/press/mo...figs_june09.htm

Gross mortgage lending by building societies was £1,976 million in June 2009, compared to £3,254 million in June 2008.

Commenting on the mortgage figures, Brian Morris, Head of Savings Policy at the BSA, said:

“Gross mortgage lending by building societies was just under £2 billion in June 2009, the highest level seen this year, and up 30% on May. Despite this, lending remains at historically low levels, and is 40% lower than in June 2008. Mortgage approvals show signs of stabilising as they reached a year high of £1.8 billion, but are more than 30% down on this time last year.â€

In the savings market, building societies experienced a net withdrawal of £2,239 million in June this year, compared to a net inflow of £419 million in June last year.

Commenting on the savings figures, Mr Morris said:

“The withdrawal experienced by the building society sector is not unexpected given the very challenging economic backdrop. With rising unemployment, subdued income growth and the official Bank Rate at an historic low, it is very difficult to attract retail savings. In addition, there is evidence households are looking to take advantage of the low interest rates to pay off debt rather than save. These conditions are expected to persist into 2010.â€

* Building society gross lending was £1,976 million in June 2009 compared to £3,254 million in June 2008.

* Net lending by building societies in June 2009 was -£511 million compared to -£471 million in June 2008.

* Mortgage approvals in June 2009 were £1,817 million compared to £2,721 million in June 2008.

* Including interest credited, savings balances held by building societies decreased by £1,913 million in June 2009, compared to a £865 million increase in June 2008.

* Building societies had a net withdrawal of £2,239 million in June 2009 compared to net receipt of £419 million in June 2008.

* Building societies had a net withdrawal of £714 million from Cash ISAs in June 2009, compared to net receipts of £75 million in June 2008.

Ouch on the savings balances. I understand NS&I had an exodus too so does the increase in savings show up in the BBA bank figures?

http://www.bsa.org.uk/docs/presspdfs/funding_june09.pdf

http://www.bsa.org.uk/docs/presspdfs/lending_june09.pdf

Edited by Ash4781

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In the savings market, building societies experienced a net withdrawal of £2,239 million in June this year, compared to a net inflow of £419 million in June last year.

Just seemed worth highlighting!! And brings to mind another article a few months back:

Despite being skewed towards more secure retail deposits, 30pc of the sector’s funding – or around £100bn – comes from institutions, who may think twice following the Moody’s downgrade, and the wholesale markets, which remain effectively closed. Without funding, mortgage lending will dry up. “To the extent that funding is restricted, it will restrict our ability to lend,†Nationwide chief executive Graham Beale told the TSC. The BSA’s Adrian Coles reckons “it is quite conceivable that lending will fall this year†as funding evaporates.

Last year, the sector managed to replace much of its lost wholesale funding with £9.9bn of retail deposits. But the story now is mixed. With rates at almost zero, savers are moving their money into different investments and societies suffered overall

The lending figures though,£1,976 million in June 2009, compared to £3,254 million in June 2008 are peanuts aren't they? BBA said at the weekend :

At present about eight or nine major lenders are supplying most mortgages in the UK.

Most experts believe that banks are using the relatively low level of competition in the mortgage market to rebuild their profits, BBC business reporter Brian Milligan said.

But the Council for Mortgage Lenders insisted the risk of customers defaulting on mortgages was much higher now than before the recession.

And it was "also worth noting that the only people lending are banks", Ms Knight added.

"Building societies can't do it due to their business model and they can't get access to funds as easily."

It was also clear that many borrowers were becoming "stuck in chains" when trying to buy somewhere to live, she said, meaning banks were "granting more mortgages than are being taken up".

Presumably the £1976 million was handing out by Nationwide and Abbey?

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http://uk.biz.yahoo.com/29072009/325/bsa-g...rcent-june.html

Wednesday July 29, 11:37 AM

Reuters

BSA gross mortgage lending falls 40 percent in June

LONDON (Reuters) - Gross mortgage lending by British building societies stood at 1.976 billion pounds in June, its highest level since December, but 40 percent lower on the year, the Building Societies Association said on Wednesday.

Reuters and their stark, unspun, and thrilling sense of reality.

Edited by Realistbear

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