Building societies dominate lending to first-time buyers
7 May 2013
The building society sector is dominating lending to first-time buyers and is set for further growth in 2013, according to Deloitte, the business advisory firm.
Overall lending by mutuals in 2012 totalled £30.7bn – up 30% on 2011 and now one in every three mortgage loans is made to a first-time buyer.*
Stephen Williams, building societies partner at Deloitte, said:
“Financial results from several building societies indicate that mutuals are continuing to thrive and the sector is continuing to punch above its weight. It is striking to see how mutuals are dominating the mortgage market for first-time buyers. There are about 62 mortgage products for buyers with a 5% deposit or less and 42 are from building societies and other mutual lenders.
“The renaissance in lending to first-time buyers is encouraging and 218,000 people became homeowners last year, which the building societies significantly contributed to. This was the first time that there were more than 200,000 first-time buyers in one year since 2007.
“Societies continue to fill the gap left open in the mortgage lending market as other institutions deleverage their balance sheets. They have made good use of the Funding for Lending scheme and for the remainder of 2013 we are likely to see more lending and product innovation from building societies. However, one of the main challenges mutuals face is how they cope with increased regulation from UK and European supervisors.”
Note to editors:
* Figure: Building Societies Association
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.
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