Building societies increase mortgage market share by 4%

Building societies increase mortgage market share by 4%

New data from the BSA has revealed that building societies approved 114,793 or 29% of all new mortgages in Q3 2017 - a rise of 4% against the same peroid a year earlier.

According to the figures, there were 397,532 new mortgage approvals across the market, giving building societies a market share of 29%.

Gross lending by building societies was £17.3bn, up 6% on the £16.4bn lent in the same period in 2016. Total market gross lending was £68.1bn, giving building societies a market-share of 25%.

Building societies hold outstanding mortgage balances of £297.3bn, a 22% market-share.

Savings balances held with building societies increased by £1.3bn, down 71% on the £4.5bn in the same period in 2016, which the BSA says mirrors a trend of weak growth across the savings market as a whole.


Andrew Gall, Chief Economist at the BSA said: “Building societies took a sizeable market share of mortgage lending in the third quarter of 2017. Activity in the market has been subdued but there was a pick-up in remortgaging activity prior to the widely anticipated rise in the Bank Rate from 0.25% to 0.50% as borrowers fixed their mortgage before rates increased. Almost 90% of new mortgages in Q3 were on fixed rates, so many homeowners will be protected from interest rate rises for a number of years.

Savings balances at building societies increased by over a billion pounds in Q3 of this year, but this is significantly lower than in the same period last year. This mirrors a trend of weak growth across the savings market as a whole. Households have been dealing with prices rising faster than wages for some time, and may now be using savings to supplement their income. The rise in Bank Rate should give savers a small boost, but households may struggle to save more until wages grow faster than inflation.”

Brian Murphy, Head of Lending at Mortgage Advice Bureau, commented: “The report suggests that building societies accounted for nearly 30% of gross lending in the last quarter, which is the same as was reported in Q2. This would perhaps suggest that building societies have maintained the competitive advantage that they have over their banking counterparts, both in terms of the ability to offer market leading rates, but also perhaps a more flexible and pragmatic underwriting approach.

Of course, the upswing in remortgages over the last quarter has no doubt provided building societies with a window of opportunity to grow their client base to balance the fact that the purchase side of the market was perhaps a little flatter in some areas than normal. Given that the market is now aware that rates will rise again between now and 2020, albeit at an incremental pace, and also that fixed rates are proving so popular with consumers who are seeking to lock into the best rates whilst they are still available, it will be interesting to see how building societies respond to borrower demand, particularly in the currently more underserved areas of the market, in the coming months.”

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Tony Gimple
Tony Gimple 09 Dec 2017

Linking professionalism to limited company borrowing is a flawed concept. Despite S24 etc., limited companies are the most tax inefficient way of running a property business and leave borrowers seriously...

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

It's normal. If you plan to buy a house in one of the most beautiful spots in the country you should pay a high price.

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

I think that the situation will be the same at December.

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Scott Garnet
Scott Garnet 06 Nov 2017

If you have a patio or a porch it is important to make sure that any connecting doors are secured. Good advice for sliding glass doors is replacing the panels with storm resistant glass and getting heavier...

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richardrawlings
richardrawlings 01 Nov 2017

What has not been mentioned here is the effect of not only higher interest payments, but also that these payments are less likely to be offsettable as a business cost due to the scaling back of mortgage...

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Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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