According to the latest report from the Building Societies Association (BSA), despite a 'relatively subdued market', building societies are maintaining a high market share of mortgage lending approving one in three new mortgages across the UK in Q1 2017, as well as providing a third of loans made to first time buyers.
The BSA's data shows that building societies were responsible for 50% of the growth in the mortgage market, contributing £3.9bn net lending of the total £7.9bn across the market.
In total, building societies approved 112,287 new mortgage loans, up 2% on the 109,762 mortgage loans approved in the same period in 2016, to take a market share of 31%.
Gross lending by building societies remains 15% lower compared to the same period in 2016 when Stamp Duty changes distorted the market.
Robin Fieth, Chief Executive of the BSA, said: “Activity in the mortgage market was relatively subdued in the first quarter of the year. Homebuyers have been struggling with low levels of properties coming on the market, meaning the availability of suitable housing is limited and so fewer transactions have taken place. House prices as a multiple of earnings are also hovering around their historic peak, making affordability more difficult for first time buyers or those moving up the property ladder. These conditions are unlikely to change in the near term and so activity will remain subdued for the remainder of the year. Although house prices have reduced slightly in recent months, the record low mortgage interest rates currently on offer and the lack of housing supply relative to demand will support house prices over the year.
Despite the challenges facing the housing market, building societies have maintained a high market share of mortgage lending. Collectively they approved one in three new mortgages between January and March, and delivered half the growth in the whole market. Buying a home is not always a straightforward process and each borrower has different needs and faces different circumstances. Building societies are able to take a more personalised approach to lending, responding to factors including changing age demographics and working patterns.”