Mortgage lending by mutuals was £1.8bn in December

Gross lending by mutuals totaled £20.4 billion in 2010. Mortgage approvals made by mutuals in December amounted to £1.2 billion, compared to £1.9 billion in November.

Paul Broadhead, head of mortgage policy at the BSA, said:“Gross lending by mutuals was slightly lower in December compared to November. However lending has remained relatively stable in second half of 2010. December is typically a quieter month for the mortgage market and a drop in approvals at the end of the year is not uncommon. It is likely, however, that the adverse weather conditions in the period contributed to a more significant decline in approvals than one would normally expect.”

Savings balances held with mutuals increased by £1.5 billion in December 2010, following an increase of £0.6 billion in November. Excluding interest credited to accounts, mutuals had a net receipt of £1.1 billion in December. Total balances at mutuals increased by £154 million in 2010.

Brian Morris, head of savings policy at the BSA, added: “Savings balances at mutuals increased for a second consecutive month in December giving mutuals a strong end to the year. However, households face a challenging year ahead and may well need to dip into - or defer - savings to supplement their incomes. Growth of household savings balances is therefore likely to remain relatively subdued in 2011.”