Gross Mortgage Lending Declines By Half – BSA

According to the latest press release published by the Building Societies Association on Monday, November 30th, the total value of mortgages approved by UK building societies amounted to £1,511 million in October, which means that it remained almost unchanged from its level in September - £1,565 million. At the same time, gross mortgage lending of UK building societies, which reached £1,666 million in October, also remained broadly in line with £1,605 million lent to borrowers in September. However, year-on-year changes are more evident; according to the figures, which have not been seasonally adjusted yet, gross mortgage lending by building societies in October 2009 fell almost by 50% to £1,666 million, down from £3,105 million in October 2008. Net lending saw an even more depressing picture, as it dropped from £394 million in October last year to -£521 million last month. The number of mortgage applications approved by UK building societies also shrunk by almost a half, from to £2,902 million in October 2008 to £1,511 million in October 2009. Let us remind that the Building Societies Association is the largest union of UK building societies that includes 52 members. Members of the BSA and their subsidiaries account for more than £245 billion of residential mortgages, which is almost a quarter of the total outstanding in Great Britain. According to Mr. Adrian Coles, BSA director general, the findings of the BSA associated with lending show that the year of 2009 saw modest improvements in the situation on the UK housing market in the past 2 quarters. The level of mortgage lending, however, remained low in 2009, especially when compared to boom years. Mr. Coles explained it by difficult market environment, which includes complicated funding conditions, low property supply and depressed demand from buyers; he predicted that the situation on the UK property market will remain unchanged until the above-mentioned conditions improve.