Mortgage lending by mutuals grows 10% in September

Gross mortgage lending by mutuals was £2.2 billion in September, which is 10% greater than the £2.0 billion lent in August, according to the Buildings Societies Association (BSA). Mortgage approvals made in September amounted to £1.9 billion, a slight increase on the £1.8 billion approved in August.

Commenting on the figures, Adrian Coles, Director-General of the BSA, said: "Although the mortgage market remains relatively weak, mutual lenders have seen a slight increase in lending over recent months. However, recent reports of house price declines are likely to reduce demand for house purchase, and the effects of the Spending Review may also weigh on buyers' confidence."

Savings balances held at mutuals decreased by £569 million in September, following a decrease of £699 million in August.  Excluding interest credited to accounts £819 million was withdrawn in September, compared to £1,023 million in August.

Commenting on the savings data, Adrian Coles said: "The economic outlook remains challenging for households. The labour market remains weak, causing earnings to grow at a rate below current price inflation. It is therefore particularly hard in the current low interest rate environment to attract households to save."