Building society lending to housing associations up by 25%

Building society lending to housing associations totalled £2.0 billion in 2006, compared to £1.5 billion in 2005, representing an increase of 25%, according to the Building Societies Association (BSA).

Over £7.3billion in loans were outstanding to societies from housing associations at the end of the year.

Building societies had a market share of 44% of gross lending to housing associations in 2006.

Funds lent to housing associations are used to build new social housing and improve the quality of social housing, giving tenants the opportunity to access good quality homes.

Commenting on the figures, Neil Johnson, PR and Policy Manager at BSA, said “the increase in lending to housing associations by building societies is a clear indication of societies’ commitment to social housing and ensuring that people can have good quality accommodation regardless of tenure.

He continued “Even though building societies only account for 18% of total mortgage lending, 44% of loans to housing associations are from building societies. At a time when property ownership is increasingly moving out of financial reach of many people, social housing is of critical importance. Helping all groups of people get the home that they want has always been a key objective of building societies, and these impressive figures demonstrate societies putting this into practice.”

The Barker Review identified a need for an additional 23,000 social homes to be built each year over current levels to meet current demand and to make inroads into the social housing backlog. According to the Review, this would require an investment of £1.6billion each year.