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UK homebuyer lending hits £12.1bn

UK homebuyer lending hits £12.1bn

Building societies and other mutual lenders continued to extend lending to UK homebuyers with net lending of £12.1 billion in the first eleven months of 2013.

This is almost double the £6.2 billion in the first eleven months of last year. Meanwhile net lending by all other lenders was minus £2.1 billion in the year to November 2013, according to the Building Societies Association (BSA).

Building societies and other mutual lenders funded £1.1 billion in November 2013.

Commenting on the figures, Robin Fieth, the new Chief Executive of the BSA, said: “Building societies and other mutual lenders have performed strongly in their two core markets, savings and mortgage lending, over the past year.

“Mutuals have almost doubled their net lending to homebuyers in 2013, and almost a third of mortgage loans have been to first-time buyers, who are key to a thriving housing market. The mortgage market and the wider economy is now showing signs of recovery, but with this has come some concern from consumers about a potential rise in interest rates.

“However, many homeowners have opted to fix their mortgages over the past year to take advantage of the current low interest rate environment and to provide some resilience against future interest rate rises. BSA data shows that in the year to November 2013 the vast majority (96 per cent) of loans made by mutuals to first-time buyers were at fixed rates. If interest rates do increase they will do so gradually, and hopefully against a background of rising incomes as the economy continues to recover. If consumers are concerned about rising mortgage costs and the impact this could have on their finances then there are a number of fixed rate products available on the market which could help. Consumers should speak to their lender or mortgage broker to find the best solution for them.

“Whilst mutuals have increased their lending in 2013, underwriting standards have remained high, and levels of arrears have actually reduced over the past year, as they have done across the market. The mutual sector has performed better than the market as a whole in this area with levels of arrears at two thirds of the market average.

“Savings balances at mutuals fell in November, but are up significantly up in the first eleven months of 2013 compared to the same period in 2012. Annual consumer price inflation fell to 2.1 per cent in November; the lowest it has been for around four years, but it still runs above growth in average earnings. Wage growth may begin to increase in 2014 if the economic recovery is sustained, which would enable more households to make regular savings”.

November mortgage lending highlights:

  • Gross lending up 33 per cent to £3.6 billion compared to £2.7 billion in November 2012;
  • Total gross lending for the first eleven months was £37.5 billion, 32 per cent higher than same period in 2012;
  • Gross lending market share for the first eleven months of 2013 was 23 per cent up from 21 per cent in January-November 2012;
  • Around one in three new loans from mutuals in the eleven months to November were made to first time buyers (78,300 loans) of which 29 per cent were made to borrowers with a deposit of 10 per cent or less;
  • Net new mortgage lending (gross lending minus repayments and redemptions) was £1.1 billion in November up 84 per cent on November last year;
  • Total net new lending by mutual lenders between January and November 2013 was £12.1 billion, almost double the amount in the same period last year; and
  • Total net new lending for the mortgage market as a whole January – November was £10 billion

Savings balances in November:

Retail savings balances at mutuals fell by £590 million in November compared to an increase of £660 million in the same month last year; and

In the first eleven months of this year retail savings balances have risen by a total of £6.7 billion compared to a £2.2 billion increase between January – November 2012.

Mutual statistics November 2013



November 2013

November 2012

Gross Lending



Net Lending



Mortgage Approvals (£)



Mortgage Approvals (No)



Change in Savings Balances



Net Receipts - All Savings



Net Receipts – ISAs



Data is not seasonally adjusted

The BSA represents mutual lenders and deposit takers in the UK including all 45 UK building societies. Mutual lenders and deposit takers have total assets of over £330 billion and, together with their subsidiaries, hold residential mortgages of over £230 billion, 18 per cent of the total outstanding in the UK. They hold over £230 billion of retail deposits, accounting for 19 per cent of all such deposits in the UK. Mutual deposit takers account for over 30 per cent of cash ISA balances. They employ approximately 39,000 full and part-time staff and operate through approximately 1,600 branches.

The published data relates to 45 building societies and four other mutual deposit taking and lending institutions in the UK.

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