Despite overall gross lending figures from the Council of Mortgage Lenders showing that July saw record increases, building society gross advances only amounted to £4,465 million in July 2007, compared to £4,888 million in July 2006.
Net Advances were £598m in July 2007, versus £1,662m in July 2006, whilst approvals were £4,014m in July 2007 down from £5,499m in July 2006.
Building societies had net receipts of £723m in July 2007 compared to £444m in July 2006. In addition, building society net receipts to cash ISAs were £167m in July 2007, compared to £119m in July 2006.
Commenting on the mortgage figures, Adrian Coles, Director General of the BSA said: “The strong start to the year has fallen away - this is a tale of the five interest rate rises in the last year feeding through to the market.
“As mortgage payments increase, household finances are likely to be squeezed further. Even if interest rates are near to their peak, potential borrowers need to think about all of their outgoings to make sure they do not overstretch themselves financially.
“Societies are continuing to ensure that they lend responsibly to people who can afford to borrow. This ensures that borrowers should be able to repay their loans - societies don’t want to lend to people who are going to have difficulty making repayments.”
Commenting on the improvements in savings figures, Coles added:
“Savings in July increased strongly from a year ago, with net receipts up 62.8% compared to July 2006. The higher rates of interest on offer compared to year ago are tempting savers to make additional deposits.”
