But building societies maintained their mortgage market share of 23% in Q1 2020 and hold outstanding mortgage balances of £336.6 billion.
This is a 3% increase from £327.3 billion in the same quarter of last year, according to the latest figures from the Building Societies Association.
Gross lending in Q1 2020 was £13.5 billion, a 21% market share, but down 19% on the £16.7 billion in Q1 2019.
Net lending was £0.9 billion, an 8% market share, but down 83% compared to the £5.1 billion year-on year.
Building societies approved 101,000 new mortgage loans, a 27% market share, but down 16% on the 121,000 loans in Q1 2019 and they lent to over 19,500 first-time buyers.
Savings market
Building societies hold savings balances of £297.3 billion, an 18% market share, and up 4% on the £284.7 billion at the end of Q1 2019.
Savings balances increased by £3.1 billion, a 14% market share, but down 20% on the £3.8 billion increase in Q1 2019.
Cash ISA balances at building societies grew by £0.7 billion and at banks the increase was £1.3 billion. Societies have a share of 39% of all cash ISAs deposits.
Comment
Paul Broadhead, BSA head of mortgages and housing, commented: “Building societies performed well in the first quarter of the year, approving nearly a quarter of new mortgages in the UK during the period.
“Lending activity was beginning to pick up following uncertainty surrounding the UK’s withdrawal from the EU at the end of January. However, the coronavirus outbreak has understandably paused any momentum.
“With the housing market effectively halted between the end of March and end of May, lending activity in the second quarter of the year will be materially lower than normal. However, the building societies are well placed and resilient enough to weather the storm and are preparing to ramp up lending now that the housing market is beginning to reopen.
“Building society savings balances grew in the first quarter of the year. Early evidence indicates that the support of the Government furlough scheme, coupled with the fact that many people have spent less during lockdown may promote growth in cash savings in total.
“However personal financial resilience will be on the minds of many people as the economic implications for individuals start to become clearer.”
