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Building societies still lending despite the credit crunch

March 27, 2008 by admin  
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Building societies are still in a good position to offer funds for mortgages despite some announcing they were restricting lending, one financial expert has claimed.

According to the Building Societies Association (BSA), action taken last week by certain building societies was not an indication that these providers were struggling in the wake of the credit crunch.

With certain larger lenders withdrawing from the marketplace, many smaller firms were inundated with applicants which required a re-adjustment of service levels to ensure customers were still dealt with, said the firm.

Neil Johnson, PR and policy manager for the BSA, said: “Building societies are largely funded by retail deposits rather than wholesale markets. So the problems in the wholesale markets haven’t affected them in the same way that they’ve affected banks.”

Earlier this month, the BBC reported that five building societies – the Bath, the Earl Shilton, the Newbury, Melton Mowbray and the Tipton & Coseley – had restricted or halted new mortgage lending due to an influx of new customers.

Tags: good position, month, Financial services, economics, societies, business, bank of england, Social economy

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