Building society mortgage approvals up 6% in Q3

The figures for all 44 building societies show that gross lending totalled £16.4bn, 9% higher than the £15.0bn lent in the same period in 2015, giving them a 26% market share.

Building societies approved 110,129 new mortgage loans in Q3, up 6% on the 103,758 loans approved in Q3 2015, while across the market as a whole the number of approvals fell by 5%.

There were 366,125 new mortgage approvals across the whole mortgage market between July and September, meaning building societies took a market share of 30%.

The BSA data shows that building societies were responsible for 45% of mortgage market growth in Q3, contributing £4.9bn of the total £10.9bn net lending across all mortgage lenders.

More than half (55%) of new building society mortgages for house purchase in Q3 were to first-time buyers.

In the savings market, balances held with building societies increased by £4.5bn in Q3, up 22% on the same period last year to give building societies a 21% share.

This leaves building societies with an outstanding savings balance of £260.2 billion, an 18% share of the £1,411.3 billion across the market.

Andrew Gall, BSA Chief Economist, said: “The mortgage market has slowed after the rise in Stamp Duty on second homes in April, and the uncertainty following the EU referendum in June. However, the number of mortgages approved by building societies in the third quarter was up 6% on the same period last year, whereas across the market as a whole the number of mortgages approved was down by 5%. The sector’s continued significant share of mortgage lending demonstrates the competitive rates on offer and societies’ ongoing commitment to help consumers realise their aspirations to buy a home.

“New savings deposits with building societies increased by 22% in the third quarter compared to the same period last year, despite the reduction in Bank Rate in August. Households may have increased their precautionary savings given a slightly weaker outlook for the labour market, and higher expected inflation. Some degree of uncertainty is likely to prevail over the next few years as the UK’s exit from the EU and our new relationship are negotiated. This could see continued volatility in equity markets, further boosting the appeal of cash savings.”