Building societies supporting one-in-three first-time buyers

Building societies and the two mutual-owned banks continued to grow their support for homebuyers in the six months to March, despite affordability pressures and intense competition for retail deposits.

The latest figures from the Building Societies Association show that building societies and mutual-owned banks continue to play a key role in helping aspiring homeowners get onto the property ladder. In the six months to March, they provided 61,730 mortgages to first-time buyers, accounting for almost a third (32%) of all lending to new homebuyers.

The sector's mortgage balances increased by £7.5 billion to £499 billion over the period, accounting for 29% of all outstanding mortgage loans.

Paul Broadhead, head of mortgage and housing policy at the Building Societies Association, said: "With the Bank Rate remaining unchanged, many homeowners and prospective buyers will welcome the stability after several weeks of uncertainty. While mortgage interest rates remain higher than at the start of the year, the market remains active with strong competition between lenders and average mortgage rates have reduced over the past three months.

“What these figures demonstrate is the value of having a diverse financial services market. Building societies continue to use their mutual model to support those that can often find it hardest to access homeownership, while also delivering better value for savers.

“At a time when household finances remain stretched, consumers are increasingly choosing organisations that focus on long-term value rather than short-term shareholder returns, which is one reason why building societies’ mortgage and savings balances continue to grow.”