Home lending activity remains subdued ahead of budget

Mortgage lending Q3 2017

• Building societies approved 114,793 new mortgage loans, up 4% on the 110,216 mortgage loans approved in Q3 2016. (Q2 2017: 112,835).
• There were 397,532 new mortgages approvals across the market, giving building societies a market-share of 29%.
• Gross lending by building societies was £17.3bn, up 6% on the £16.4bn lent in the same period in 2016. (Q2 2017: £16.1bn).
• Total market gross lending was £68.1bn, giving building societies a market-share of 25%.
• Building societies hold outstanding mortgage balances of £297.3bn, a 22% market-share.

Commenting Andrew Gall, Chief Economist at the BSA said “Building societies took a sizeable market share of mortgage lending in the third quarter of 2017. Activity in the market has been subdued but there was a pick-up in remortgaging activity prior to the widely anticipated rise in the Bank Rate from 0.25% to 0.50% as borrowers fixed their mortgage before rates increased. Almost 90% of new mortgages in Q3 were on fixed rates, so many homeowners will be protected from interest rate rises for a number of years.

“Savings balances at building societies increased by over a billion pounds in Q3 of this year, but this is significantly lower than in the same period last year. This mirrors a trend of weak growth across the savings market as a whole. Households have been dealing with prices rising faster than wages for some time, and may now be using savings to supplement their income. The rise in Bank Rate should give savers a small boost, but households may struggle to save more until wages grow faster than inflation.”