Building societies have seen record levels of cash inflows, with around £1.8bn of savings deposited during April 2008, according to the Building Societies Association (BSA).
However, net lending levels among building societies have fallen by 40% over the past twelve months due to the continuing credit crunch.
Building societies had net receipts of £1,820m in April 2008, up 35% from £1,351m in April last year.
The BSA says cash ISAs were a primary driver of the record savings figures, with around £2.05bn deposited in April. The amount deposited in ISAs is higher than overall figures because some withdrawals from other savings accounts were made to make deposits into an ISA.
Adrian Coles, director general of the BSA, says: “Savers are increasingly recognising that the very competitive saving products that building societies offer represent excellent homes for their cash in these uncertain economic times.
“It appears that building society cash ISAs were particularly popular because of a less optimistic outlook for future stock market performance.”
Gross lending fell slightly, down from £3,768m in April 2007 to £3,645m more recently.
However, net lending fell drastically, down from £1,114m to just £666m over the last twelve months, a fall of 40%.
Coles says building societies do not depend on wholesale funding markets and still have funds available for mortgage lending despite the depressed mortgage market.
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