BSA: Summer highs in saving and borrowing

Building society gross advances amounted to £4,397 million in August 2005, compared to £4,707 million in August 2004.

Net advances were £1,628 million in August 2005, down from £1,959 million in August 2004.

Approvals (loans agreed, but not yet made) increased to £4,496 million in August 2005, from £3,638 million in August 2004.

In the savings market, building societies had net inflows of £1,350 million in August 2005, up from £1,191 million in August 2004.

Building society net receipts into cash ISAs were £93 million in August 2005.

Commenting on the mortgage market, Adrian Coles, director-general of The BSA, said: "Lending has clearly stabilised, with the August figures showing a slight increase over the early summer months. The prospect of a housing market crash now seems even more remote; the August base rate reduction has clearly helped to dispel any gloomy thoughts amongst home buyers."

On the savings side, Mr Coles said:

"Savers continued to invest heavily in building societies last month. More than £1 billion (seasonally adjusted) has been invested in building societies in each of the last three months — the first time this has occurred for over four years. Consumers clearly see the advantage of secure, low risk, attractively priced savings accounts in the current uncertain economic environment."