Building Societies had a record year of gross lending in 2006, their trade body has revealed.
Mutuals lent £52.8bn last year, the highest yearly figure on record, according to the Building Societies Association. It comes after the Council of Mortgage Lenders revealed yesterday that overall gross mortgage ledning reached £346bn in 2006, 20 per cent up on the year before, and another record figure.
But the BSA warns that declining net lending towards the end of the last year, following two rate rises in 2006 the second half of 2006, points to declining market this year given the quarter point rate rise to 5.25 per cent earlier in January.
BSA director general Adrian Coles says: “It takes some months for the mortgage market to adjust to a rate rise, but these figures suggest that last year’s rises were starting to take effect.
“Net mortgage lending from building societies has declined from recent highs in the past few months and in December was down year on year by 32.3 per cent.
“It is likely that the impact of interest rate rises will continue to feed through, dampening demand. However, we predict building societies will still have a successful 2007.”