The suffering mortgage market had a slight boost in November as net lending by building societies rose to £422m from £413m in October, although approvals dropped.
Gross mortgage lending dropped to £2,595m in November 2008, compared to £4,070m during the same month in 2007, according to figures from the Building Societies Association (BSA).
Despite the rise in lending towards the end of last year, mortgage approvals from building societies were also down at £2,082m in November compared to £2,777m in October. This is a significant drop from the £3,850m recorded in November 2007 as providers refused to take on unnecessary risks and tightened their lending criteria.
These figures are supported by data from the Bank of England, also released today, which showed UK mortgage approvals fell to 27,000 in November from a downwardly revised 31,000 in October. This is the lowest level since this series began in January 1999 and is well below forecasts.
Adrian Coles, director general of the BSA, comments: "The depressed housing market is seeing mortgage lending by building societies remaining low. With recent figures from the Land Registry suggesting that property prices continued to fall in November and with concerns over job security high, it is no surprise that buyers are keeping out of the market.
"However it is encouraging to note that after the negative net advances figures in the summer the last three months have seen positive figures which suggests perhaps that the market is not deteriorating even further."
Savings figures were more positive with building societies seeing net receipts of £636m in November 2008. This did not reach the heights of the £2,348m taken in November 2007 but this figure was heavily influenced by the run on Northern Rock.
Coles comments: "With the 150 basis point interest rate cut in November people were anxious to take out fixed rate savings accounts before the cut was reflected in the savings rates offered by societies, while some reclaimed savings from failed Icelandic banks will have also been deposited in society accounts."
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