Commenting on the mortgage figures, Brian Morris, head of savings policy at the BSA, said: "Gross mortgage lending by building societies was just under £2 billion in June 2009. Despite this, lending remains at historically low levels, and is 40% lower than in June 2008. Mortgage approvals show signs of stabilising as they reached a year high of £1.8 billion, but are more than 30% down on this time last year."
Net lending by building societies in June 2009 was -£511 million compared to -£471 million in June 2008; mortgage approvals in June 2009 were £1,817 million compared to £2,721 million in June 2008.
In the savings market, building societies experienced a net withdrawal of £2,239 million in June this year, compared to a net inflow of £419 million in June last year.
Commenting on the savings figures, Morris said: "The withdrawal experienced by the building society sector is not unexpected given the very challenging economic backdrop. With rising unemployment, subdued income growth and the official Bank Rate at an historic low, it is very difficult to attract retail savings. In addition, there is evidence households are looking to take advantage of the low interest rates to pay off debt rather than save. These conditions are expected to persist into 2010."
