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Building societies deliver strong mortgage lending in Q2

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  • 15/08/2016
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Building societies deliver strong mortgage lending in Q2
Gross mortgage lending at building societies reached £15.9bn in the second quarter, a 16% rise on the same time last year, figures published by the sector’s trade body show.

According to the Building Societies Association (BSA), gross mortgage lending failed to keep pace with the first quarter of the year when £17.7bn was lent out, as transactions were brought forward ahead of changes to Stamp Duty tax for buy-to-let investors.

The trade body, which represents all of the UK’s 44 building societies, said despite a fall in lending since the first quarter, the sector had managed to maintain its mortgage market share of 28%, unchanged since Q1.

Lending through building societies accounted for 82% of the mortgage market’s growth in the second quarter, as it contributed £5.5bn of the total £6.7bn in net lending made by the market, the BSA said.

Overall, 118,600 mortgages were approved by building societies between April and June, up from 98,300 during the same period last year, and 109,800 in the first three months of 2016.

Andrew Gall, chief economist at the BSA, said: “Building societies remain popular with consumers, performing strongly in both the mortgage and savings market in the second quarter of the year. It remains too early to tell how confidence in the housing market will be affected by the decision to leave the EU, but it remains business as usual for building societies.

“Mortgage rates are already falling following the actions taken by the Bank of England earlier this month. Even before this, building societies offered excellent value to borrowers with an average mortgage rate of 2.75% in July compared to the market average of 2.93%.”

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