Mortgage blog: Building society lending grows as mutuals offer great mortgage deals


Friday 10th August 2012

Lending by building societies is on the increase

For years, it has been the main High Street banks that have dominated the UK mortgage market. Now though, it is building societies that are increasing their market share and offering some of the best lending rates. If you're looking to buy a new property, it's increasingly likely that your next mortgage could be with a mutual lender.

New figures show that gross mortgage lending by building societies and other mutuals was up by 38% in the first half of 2012 compared with the same period in 2011. Gross lending by building societies reached £14.1 billion in the six months ending June 2012, compared with £10.2 billion over the same period in 2011. The data shows that lending rose 28% to £2.7 billion in June 2012, up from £2.1 billion a year ago.

Recent data from the Council of Mortgage Lenders found that mid-range lenders including many building societies increased their market share last year. My Introducer reports that the 7th to 11th largest lenders in the UK saw their market share increase from 9.9% in 2010 to 13.2% last year. The Nationwide, Leeds, Yorkshire, Coventry and Skipton building societies all increased their market share in 2011.

Building Societies Association head of mortgage policy Paul Broadhead says: "In the first half of the year, lending by building societies and other mutuals grew by 38%. Lending by mutuals has grown in each month of 2012 on a year on year basis, and the June figures for mortgage approvals are above the previous six months' average. This means that lending by mutuals looks likely to continue to be strong in coming months."

Keith Osborne from says: "Increasingly, building societies are starting to offer some of the most competitive mortgages in the market and so it's no surprise that many are increasing their market share. Previously provincial mutuals such as the Principality, Nottingham, Leeds and Skipton building societies are becoming ever-increasingly important players in the mortgage market. For anyone looking to buy a new house there is a now a much higher chance that your mortgage will end up being through one of these forward thinking and well-run building societies."

Mr Broadhead added: "Growth in lending by banks over the past six months has been relatively weak while the economy remains in recession. In contrast, mutuals have demonstrated their commitment to lend, and are currently offering some of the best rates available in the market."

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