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Society lending down in December

Lending by building societies plummeted at the end of last year with net advances falling by £278m from £961m in November to £683m in December, according to the Building Societies Association.

The BSA says the drop reflects the removal of Bradford & Bingley from the monthly survey, following its conversion to plc status at the beginning of December.

The figures show gross advances fell in December to £2.04bn from £2.33bn in November. But taking into account fewer working days and the traditional decline around Christmas, net advances fell by only £23m to £937m in December from £960m the previous month.

Despite the figures, the BSA believes the outlook for January is good, as borrowers abandon B&B to stay with a mutual building society.

Director general Adrian Coles says: “The fourth quarter was very strong for building societies in terms of net advances and well up on the same period last year. Although the figure in December was down on November, the underlying housing picture remains healthy.

“We anticipate that the Bradford & Bingley situation will have some effect on January&#39s receipts, reflecting an inflow of money from people who wish to keep their money with a mutual.”

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