Mortgage approvals and gross lending hold steady

The value of building society mortgage approvals in October was £1,511 million - broadly in line with the £1,565 million of approvals in September, according to the Buildings Societies Assocation (BSA). Gross lending also remained steady with £1,666 million being lent in October compared to £1,605 million in September.

Commenting on the lending figures, Adrian Coles, BSA Director-General, said: "Modest improvements in the housing market have occurred in recent months, especially when compared to the start of the year, however lending still remains subdued compared to previous years. Funding conditions remain difficult and the supply of properties to the market is low, frustrating any increase in demand for house purchase. Lending activity is likely to remain depressed until funding and supply conditions improve."

In the savings market balances held in savings accounts at building societies reduced by £929 million in October. After interest credited to accounts is excluded, building societies had a net withdrawal of £1,240 million.

Commenting on the savings figures, Mr Coles said: "There is little incentive for people to increase savings whilst the Bank Rate remains at its current low level, and many may opt to repay debt instead. This is reflected in a reduction in savings balances at building societies this month.

Building societies and other deposit takers are also facing heightened competition from institutions with a Government guarantee, which is creating further distortions in the savings market."