Gross lending by mutuals up 24% year-on-year in November

There was a 16% increase in gross mortgage lending for the first 11 months of 2011 at £21.5bn compared to £18.6bn during the same period in 2010.

Mortgage approvals also rose in November to £2.1bn, up 13% on November 2010 when it stood at £1.9bn.

A spokesman for the BSA said that the boost in gross lending has been down to mutuals preparing for a market recovery.

“Over the last couple of years mutuals have been repairing their balance sheets and preparing themselves for a recovery. What they’ve been able to do is still offer competitive savings rates, so they’ve been able to pull the savings in and lend it out to individuals.

“Mutuals are very much in business and they're out there lending. We're not complacent and we’re very aware that there are tough market conditions out there. But as we’re seeing, mutuals are still able to get out there and lend.”

Meanwhile, also today, data released by the Bank of England has shown that total lending to individuals by banks and building societies rose by £1.0bn in November, in line with the previous six-month average.

Gross lending secured on UK dwellings was £12.6bn in November, higher than the previous six-month average of £11.7bn.

Repayments in November were £11.6bn, higher than the previous six-month average of £11.2bn.

The number of loan approvals for house purchase stood at 52,854, higher than the previous six-month average of 50,266. The number of approvals for remortgaging decreased in November to 31,154 and was lower than the previous six-month average of 32,448.

David Braithwaite, director of financial adviser, Citrus Financial Management said that the drop in the number of remortgages could reflect people’s belief that interest rates will be on hold for some time.

"The fall in remortgage activity may also reflect declining equity levels in the UK's housing stock as house prices continue to slide downwards.

"Looking forward, 2012 will be about matching willing borrowers with reluctant lenders. At best we'll be moving sideways."