UK mortgage lending on the up

Mortgage lending in the UK by building societies and other mutual lenders is on the up, according to the Building Societies Assocation.

Gross lending rose 23 per cent in April 2012 compared to the same month last year, reveals the BSA's new report. In the first four months of 2012 lending rose 36 per cent compared to the same period in 2011. Net lending by mutuals was positive for a seventh consecutive month.

 Mortgage approvals by mutuals were up 50 per cent in April compared to the same month last year, and were 20 per cent higher than the average over the previous six months. Showing a very healthy pipeline, approvals were up 43 per cent in the first four months of the year compared to the same period in 2011.

Retail savings balances at mutuals increased by £99 million in April, compared to an increase of £1,468 million in the same month last year. After interest credited is removed there was a net withdrawal of £463 million in April. 

"Approvals were strong in April running well above the previous six month average. This clearly indicates that mutuals will continue to be active lenders to homebuyers in coming months," commented BSA Director General Adrian Coles.

"Savings balances at mutuals increased in April, but it remains difficult to attract savers when household finances are still pressed. It was welcome news to learn that consumer price inflation fell half a percentage point to 3.0 per cent in April from 3.5 per cent in March, however this is still above the growth in average earnings, and inflation is not likely to fall back to the 2 per cent target any time this year."