Mortgage lending by mutuals picks up in May

Gross mortgage lending by mutual lenders in May was £1,508 million, 8% greater than the £1,399 million lent in April, according to the Buildings Societies Association (BSA).

Mortgage loans approved (but not yet made) in May were £1,571 million, similar to the £1,527 million approved in April.

Commenting on the figures, Adrian Coles, Director-General of the BSA, said: "Mortgage lending by mutuals was slightly higher in May than in April, but confidence in the housing market remains relatively subdued.

The BSA's June Property Tracker survey found that just 45% of people thought now was a good time to buy, due to concerns about the uncertain economic outlook and in their ability to raise a deposit. As such, lending activity is likely to remain at similar levels in the months to come."

In the savings market, savings balances deposited with mutuals reduced by £373 million in May, compared to an increase of £929 million in April. Excluding the interest added to accounts in the month, there was a net withdrawal from mutuals of £576 million, compared to a net receipt of £537 million in April.

Commenting on the savings figures, Mr Coles said: "Having increased in each of the previous three months, savings balances at mutuals fell in May. Banks also reported an outflow in May.

It is perhaps unsurprising that there will be outflows in some months given the low level of the Bank Rate and as savers look to pay down debts or seek greater returns from higher risk investments."