Building Society cash inflows rise 70%

by Gill Montia

Story link: Building Society cash inflows rise 70%

The Building Societies Association (BSA) has reported record inflows from savers for March.

During the month, around £1.26 billion was received in cash deposits, a 70% rise on March 2007’s takings of £0.7billion. Building society net receipts to cash ISAs were £529 million compared to £683 million in March 2007.

Since the Northern Rock crisis last September, building society inflows have remained high and the BSA’s director general, Adrian Coles, believes savers are turning to the societies because they are trusted.

He points out that building societies have never relied on the wholesale money markets to the same extent as many rival lenders, leaving them less exposed to the credit crisis.

The societies currently secure around 30% of their funding from the wholesale money markets.

However, lending at building societies was down in March, year on year, partly as a result of interest rates increases.

In addition, some societies have been inundated with applications, as other lenders have withdrawn from the mortgage market, and have limited their lending in line with their administration capabilities.

Net lending by building societies stood at £580 million in March 2008, compared to £1,791 million a year earlier.

Mortgage approvals fell in value to £3,018 million compared to £5,243 million in March 2007.