Building society lending steady in November

Gross mortgage lending by building societies was £1.6 billion in November, compared to £1.7 billion in October.

There is usually a reduction in lending from October to November, and when seasonal factors are adjusted for, building society lending was £1.5 billion in November, the same as October.

Commenting on the lending figures, Adrian Coles, BSA Director-General, said: "Although the housing market has stabilised slightly in recent months following the drop in activity at the start of the year, lending is still at lower levels than a year ago. Funding conditions for all lenders are improving slowly, but these are still acting as a brake on lending, as is the relatively small number of properties coming to market. Lending activity is likely to remain relatively depressed in 2010 until funding and supply conditions improve."

In the savings market balances held in savings accounts at building societies reduced by £0.6 billion in November. After interest credited to accounts is excluded, building societies had a net withdrawal of £0.8 billion in November.

Commenting on the savings figures, Mr Coles said: "There is little incentive for people to increase savings while the Bank Rate remains at its current low level, and many may prefer to use their money to pay down debts, finance spending or invest elsewhere.

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

"In particular, National Savings offered a product in November which is likely to have resulted in substantial withdrawals from private sector institutions, including building societies."