Data released today by the Building Societies Association (BSA) showed the organisations approved 111,800 new mortgages during Q3 which was a 5% increase on the 106,200 loans in the same quarter of 2019.
Both gross and net lending, meanwhile, were down by 9% and 43% respectively when compared to Q3 of last year.
Yet the fact the societies secured a 28% market share of new mortgage approvals in Q3 and also lent to over 20,000 first-time buyers, have led the BSA to describe their members’ collective performance as ‘robust’.
Indeed, Paul Broadhead, head of mortgage policy at the BSA said: “It has been a turbulent year for the mortgage market, with transactions collapsing due to the lockdown in March, but approvals for house purchase recovering to 10 year highs in the third quarter, as pent up demand was released and buyers rushed to take advantage of the stamp duty holiday.
“Building societies have been able to support homebuyers during this period, approving 28% of all new mortgage loans in the third quarter of the year.”
Q3 mortgage lending
Today’s figures reveal the building societies hold outstanding mortgage balances of £338.0 billion, a 23% market share – this is up 1% on the £333.9 billion at the end of Q3 2019.
Gross lending was £14.6 billion, which was down 9% on the £15.9 billion in Q3 2019 while net lending was £1.2 billion, a decrease 43% compared to the £2.1 billion in Q3 2019.
Building societies approved 111,800 new mortgage loans (a 28% market share) and was up 5% on the 106,200 loans in Q3 2019 (26% market share).
Savings
In the savings arena building societies held balances of £297.3 billion, an 2% increase on the £291.0 billion at the end of Q3 2019.
Savings balances increased by £1.9 billion (a 5% market share) and were up 40% on the £1.3 billion increase in Q3 2019 (12% market share).
Cash ISA balances fell by £1.3 billion in Q3, a trend also experienced by the banks which saw cash ISA balances plunge by £1.9 billion. Societies had 37% of all cash ISAs deposits at the end of Q3.
Uncertainty ahead
Broadhead said while the housing and mortgage markets were buoyant at the moment, and the wider economy had recovered somewhat, we were ‘far from out of the woods’.
He added: “Around 9% of the workforce (3.3 million jobs) are currently being supported by the furlough scheme, and only once this and other government support has ended will the long term impact of coronavirus be fully understood.
“We are also concerned about the cliff edge effect of the abrupt end of the stamp duty holiday on 31 March and have called on the government to taper its removal to lessen market impact.”
