Mortgage lending down again

LONDON (ShareCast) - Savings were up but lending activity was down at Britain's building societies in May, with lending running at one-tenth of the level it was a year ago.

Net lending by building societies in May totalled £125m, according to the Building Societies Association (BSA), down from £666m in April and £1.262bn in May of last year.

Gross lending was £3,3bn, down from £3.6bn in April and £4.6bn in May 2007.

"The lending figures reflect the depressed state of the housing market," said the BSA's director-general, Adrian Coles.

"With 74% of respondents to the BSA's Property Price Tracker survey expecting property prices to fall over the next year, it is no surprise that demand for new mortgages remains low, with net lending amounting to only £125 million," Coles said.

The value of mortgage loan approvals slipped to £2.34bn from £3.19m in April and £4.62bn in May of last year.

Although savings levels rose during the month, with the building societies reporting net receipts of £853m, this was less than the £1.8bn seen in April though up from £608m in May of last year.

The upturn in savings levels in April and May follows a first quarter in which Britons reportedly saved less than at any time in nearly half a century, according to figures released last Friday by the Office for National Statistics (ONS). The ONS said the savings ratio fell to just 1.1% in the first quarter of 2008, the lowest since 1959, from 3% the quarter before.

Source: http://uk.biz.yahoo.com/080630/214/i2kwr.html