Lending from building societies dominates market.

by | Monday 22nd Nov 2021 | Mortgage News

building societies lending goes through the roof

Mortgage lending by building societies such as nationwide and Leeds Building Society has risen by 22% in Quarter 3 of 2021 compared to Quarter 3 in 2020, according to the latest figures from the BSA (Building Societies Association). The BSA has reported that building society lending totals £16.9billion now, a significant increase from £13.9billion last year. During the third quarter, societies approved 109,575 mortgage loans, 4% more than in the same period last year showing a positive outlook for the mortgage market post pandemic. Building societies now reportedly hold a 23% share of the total mortgage market.

“Flexible lending rules”

One of the building societies benefiting from this rise in figures in Nationwide building society. Nationwide alone has seen its profits more than double, something that they attribute to offering higher lending limits and more flexible lending rules on mortgages approved during the height of the pandemic and still now where other lenders are falling behind cautiously.

Chief executive of Nationwide Joe Garner has said: “Early in the pandemic we made decisions to stand by our members and to protect our financial strength. Over the last six months we have focused on providing highly competitive products for our mortgage and savings members. These have been very popular, resulting in a successful season, increased deposits, higher mortgage lending, and a larger share of the current account market.”

“By the book”

Building societies have always been a popular alternative to mainstream banks such as Natwest, Santander and, Halifax who have always traditionally dominated the mortgage market. Many building societies have a more flexible and realistic approach to real life lending and offer deals, products, and quirks that the more ‘By the book’ mainstream banks don’t offer. This coupled with the stamp duty holiday that was in place in 2020/2021 has combined to make a very interesting and very profitable concoction. Even with the stamp duty holiday ending, this hasn’t slowed anything down it seems.

Economist at the BSA Andrew Gall, has said: “The strong level of mortgage lending activity in the third quarter by building societies suggests that the tapering of the stamp duty holiday has not been a major barrier to property purchase. It is likely that households will continue to re-evaluate their housing needs in the post-pandemic world, which will to continue to support demand into the new year.”

Our advisors at Oportfolio draw on years of experience and training to make sure that we provide you with the best information and advice tailored to your own specific needs. If you want to know more about how a building society could possibly be a good lender for you, please give our friendly team a call on 02088771169.

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