Q3 data released this morning by the Building Societies Association has revealed sustained momentum in the housing market, with gross lending by building societies up 22% compared to the same period in 2020.
According to the figures, gross lending in Q3 2021 was £16.9bn, up 22% on the same period last year. During the third quarter, societies approved 109,575 mortgage loans, 4% more than in Q3 2020 (105,022). Building societies hold outstanding mortgage balances of £351.2bn, a 23% share of the total mortgage market.
Andrew Gall, Chief Economist at the BSA, comments: “The strong level of mortgage lending activity in the third quarter by building societies, and across the wider market, suggests that the tapering of the stamp duty holiday has not been a major barrier to property purchase. It is likely that households will continue to re-evaluate their housing needs in the post-pandemic world, which will continue to support demand into the new year.
“The Bank of England is sounding like it is ready to increase the Bank Rate from its historically low level of 0.1% over the coming months. Whilst this may see some mortgage rates rise, the vast majority of households are on fixed-term products and so won't see any immediate change to their monthly repayments.
“Savings balances have also grown at building societies in the period and it’s particularly pleasing to see an inflow to Cash ISAs, despite a £3.6 billion outflow across the market.”