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Societies&#39 lending booms and savings flow in

Mortgage lending boomed again last month as gross advances from building societies hit £3.1bn, up nearly 50 per cent from £2.1bn in September and £2.3bn in October 2001.

The Building Societies&#39 Association figures show net advances by societies hit £859m last month, a big rise from £487m in October 2001 and up slightly from £858m in September.

Approvals rose to £3.3m last month from £2.8m in Sept-ember and £2.2m in October last year.

Societies had net inflows of £1.1bn in October, double the £551m in September and up slightly from £1.08bn in October 2001.

The BSA says although a strong inflow is normal at this time of year, even on a seasonally adjusted basis the figure for net inflows is up by 25 per cent at £798m in October, from £606m in September and £773m last year.

It says nervous investors are reluctant to invest in equities and are putting money in mutuals, which offer a relatively safe environment and good value.

Director general Adrian Coles says: “Building societies have experienced yet another month of strong lending. The recovery of market share by building societies is clearly being sustained, with net advances almost twice the figure of a year earlier. Commitments outstanding also remain very healthy, suggesting that lending will continue at a high level.”

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