Record savings deposits for building societies
Building Societies saw a record savings inflow in April, with deposits hitting £1.8bn.
Figures released today from the Building Societies Association (BSA) showed the highest ever monthly inflow to society cash ISA accounts, with deposits hitting £2.1bn (the discrepancy between the cash ISA deposits figure (£2.1bn) and overall figure (£1.8bn) is due to cash being withdrawn from other society savings accounts and redeposited in cash ISAs).
Commenting on the figures, Adrian Coles, director-general of the BSA, said: “Yet again building societies have attracted record savings inflows during April, continuing their excellent performance in the savings market. Savers are increasingly recognising that the very competitive saving products that building societies offer represent excellent homes for their cash in these uncertain economic times. It appears that building society cash ISAs were particularly popular because of a less optimistic outlook for future stock market performance.”
This record result for savings deposits will ensure societies will remain well-funded for lending, according to Coles. He said: “The record savings figures mean that societies, unlike some wholesale funded lenders, have funds available for mortgage lending. Despite the depressed mortgage market, building societies remain open for business (every society issued new mortgages during April) and are able to lend.”
However, gross lending fell further for societies in April, down 3.3% (at £3.6bn) on the same month last year, but similar to the level seen in March 2008.
Coles added: “Although approvals picked up slightly from March, they are still down on last year, and mortgage activity will be subdued in the coming months.”