Commenting on the mortgage market, Brian Morris, head of savings for The Building Societies Association, said: "These figures show the slowdown in the housing market is continuing, confirming expectations of a quiet start to 2005.
"A slight pick up is expected, but we are not likely to see lending levels as high as in the last two years. The Chancellor’s decision to double the lower stamp duty threshold will help buyers, particularly first-timers, but at £120,000 most transactions will still be caught by the tax. Therefore it might not have a big impact on total lending."
* Building society gross advances amounted to £2,790 million in February 2005, compared to £3,407 million in February 2004.
* Net advances were £602 million in February 2005, down from £1,200 million in February 2004.
* Approvals (loans agreed, but not yet made) decreased to £3,394 million in February 2005, from £3,828 million in January 2004.
* In the savings market, building societies had net inflows of £409 million in February 2005, down slightly from £428 million in February 2004.
* Building society net receipts into cash ISAs were £140 million in January 2005.
On the savings side Mr Morris said: "The Christmas savings hangover has continued into February, as people clear debts rather than save, but we are expecting deposits to pick up into the spring. Child Trust Fund vouchers are currently being sent out, and anecdotal evidence suggests that many parents are choosing building society cash funds. In addition, the Chancellor’s confirmation in the Budget that the higher limits on ISAs will remain until 2010 is an added encouragement to savers."
