Building societies' lending doubles in Q1

Figures show:

• Building society gross advances amounted to £5,469 million in March 2007, compared to £4,199 million in March 2006.
• Net advances were £1,848 million in March 2007, versus £815 million in March 2006.
• Approvals were £5,741 million in March 2007 up from £5,643 million in March 2006.
• Building societies had net receipts of £741 million in March 2007, compared to net receipts of £384 million in March 2006.

Adrian Coles, drector-general for the BSA, said: “In the first quarter of 2007 building societies recorded net lending of £4,381 million, more than double the £2,163 million in the same period in 2006. This is largely a reflection of strong approvals (loans agreed but not yet made) seen in recent months.

“Yet again building societies saw record lending in March, with gross lending the highest ever recorded for that month. Approvals were also the highest for any March since 1988.

“However, lending may be beginning to cool. We usually see lending picking up in March, but when the seasonal variation is removed from the figures, the £4,830 million of loans approved in March is more than 12% below the average for the prior three months. Therefore, we may see slower growth in mortgage lending in coming months. A further rise in rates in May would probably take further heat out of the market later in the year.”