Building societies open 1.2m new savings accounts
by Gill Montia
The extent to which building societies have benefited from the credit crisis (in terms of deposits) has been revealed by their representative body.
The Building Societies Association has reported that 1.2 million new accounts (net of closures) were opened in 2008 as savers sought a safe haven for their cash.
The shift meant that the UK’s 55 building societies held an extra £9.9 billion in December 2008, compared with January of last year.
However, societies did see a £390 million net outflow of funds in January of this year, but once seasonally adjusted the figures indicate that inflows for the month remained healthy, at £722 million.
In addition, gross mortgage lending fell to a collective £1,570 million in January 2009, down from £2,395 a month earlier and from £4,088 million in January 2008.
Mortgage approvals for January 2009 totalled £347 million in value, compared to £3,216 million a year earlier.
The Association’s director general, Adrian Coles, comments: “With the depressed state of the housing market, it is no surprise that mortgage lending was so low in January. Indeed, repayments of existing loans exceeded new lending. Potential buyers may not enter the market while it appears that house prices are likely to continue to fall.”
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