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Mortgage lending among mutuals remains subdued
Activity in building societies remains subdued, despite a slight increase in mortgage lending last month.
Building societies and mutuals lent around one fifth (£2.2bn) to its borrowers in September, a 10% rise from the £2.0bn lent in August.
Approvals also saw a small increase from £1.8bn in August, to £1.9bn in September.
Adrian Coles, director general of the Building Societies Association (BSA), said: “Although the mortgage market remains relatively weak, mutual lenders have seen a slight increase in lending over recent months.
“However, recent reports of house price declines are likely to reduce demand for house purchase, and the effects of the Spending Review may also weigh on buyers’ confidence.”
Savings balances held at mutuals decreased by £569m in September, following a decrease of £699m in August.
Coles attributed this to challenging economic times for households. He said: “The labour market remains weak, causing earnings to grow at a rate below current price inflation.
“It is therefore particularly hard in the current low interest rate environment to attract households to save.”