Building society approvals on the rise

Mortgage approvals by building societies in March were £1.5bn compared to £742m in February.

Adrian Coles, director-general of the Building Societies Association, said: “As might be expected at this time of year, mortgage approvals in March rose sharply. Even adjusting for seasonal influences this is the highest figure since November. Although this may suggest a very slight recovery in activity in the housing market over the next few months, the environment nevertheless remains very challenging.”

Building societies experienced a small net withdrawal of £196m from savings accounts in March. However, with interest credited, balances rose by £2.1bn.

Coles added: “The Bank Base Rate was reduced to 0.5% at the beginning of March, and the figures show the impact of low interest rates and economic conditions on people’s ability and willingness to save.

“However, it is pleasing that despite this, an extra 450,000 savings accounts were open at building societies at the end of March compared to the start of the year. Over £1bn was deposited in building society savings accounts during this period and the sector’s share of the retail savings market increased from 20.2% at the end of February 2008 to 21.4% at the end of February 2009.”