Building society lending down

The number of loans being handed out by building societies has fallen, according to the Building Societies Association (BSA).

Adrian Coles, director-general of the BSA, said: “Lending at building societies was down year on year. This is partly due to building societies withdrawing products and increasing rates on new lending so that they do not become overly competitive.”

He added that some building societies have found themselves “inundated with applications” and were forced to limit their lending to preserve “high levels of service” as other lenders withdrew from the market.

Mr Coles also believes that the situation may be a product of the “greater level of uncertainty in the housing market” causing prospective buyers to wait.

The announcement comes as the Council of Mortgage Lenders (CML) praised HSBC’s recent offer to match the interest rate of any borrower coming to the end of a fixed rate deal as “a good example of market innovation”.

A spokesperson for the CML said that the offer highlighted that “there is still competition in the market despite obvious pressures”.

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With so many different types of mortgages available in the UK it can be difficult for homeowners or property purchasers to determine which is the best one for them.

Those looking to remortgage or those taking out a first mortgage can usually select from a range of special deals on mortgages from lenders that want to entice customers. Once of these is the discounted rate mortgage, which enables the borrower to enjoy lower monthly repayments compared to those on the lender’s standard variable interest rate. Read more

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