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Mortgage advances reach highest level since last summer

Building society gross mortgage advances in March reached their highest levels since summer 1998.

According to the latest Building Society Association figures gross mortgage advances increased to £2,296m in March from £1,351m in February.

The figures represent a significant boost for mutuals that have been put under severe pressure by banks in the last six months in the battle for market share. Mutuals have also spent much of the year fighting costly campaigns fending off carpetbaggers.

The BSA believes that the housing market is picking-up and is set for a long-term boom.

It says that March is traditionally a good month for house purchases but even when the statistics are seasonally adjusted they still show a significant upturn in March.

The industry association says net advances rose to £1,019m from £485m in January and approvals increased to £3,140m in March from £1,752m in February.

Building societies share of the savings market dropped to £196m from £302m.

Director general Building Societies Association: &#34Spring has arrived in the mortgage market with building society lending figures at their highest since last summer. This time of year is traditionally a good time for house purchase but even those statistics that take account of seasonal factors show a significant upturn in March.

&#34Approvals and all the seasonally adjusted indicators are at their highest since the wide scale restructuring in the building society sector almost two years ago. This suggests that this pick-up in the market will be more than just a one month blip.

&#34Mortgage lending has been relatively stable in recent months and with borrowers now benefiting from some of the lowest rates in decades it comes as no surprise that consumer confidence has returned to the housing market.&#34


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