Mortgage lending remains low

Gross mortgage lending by building societies was £2,395 million in December, down on the £2,595 million seen in November while net receipts into building societies were £897 million in December, up from £636 million in November, according to the Building Societies Association (BSA).

Commenting on the figures, Adrian Coles, Director-General of the BSA said: "Activity in the housing market remains very depressed, and as a result the amount of mortgage lending in December was low. House prices are widely expected to fall further and unemployment is rising, so potential buyers remain cautious and are staying out of the market as they wait for it to stabilise.

"Despite the Bank of England's official interest rate reducing to 2% in December, building societies were able to attract funds by providing competitive interest rates on savings accounts, and being trusted as a safe place for deposits. December's figure could also have been boosted by deposits made from compensation paid to customers of the failed Icelandic bank Icesave."

Building society statistics December 2008

Building society gross lending amounted to £2,395 million in December 2008 compared to £3,669 million in December 2007.

Net lending by building societies in December 2008 was £324 million compared to £1,055 million in December 2007.

Approvals in December 2008 were £836 million compared to £2,980 million in December 2007.

Building societies had net receipts of £897 million in December 2008 compared to net receipts of £1,888 million in December 2007.

Building societies had a net withdrawal of £212 million from Cash ISAs in December 2008, compared to net receipts of £46 million in December 2007.