Building society lending steady, but remains depressed

Gross mortgage lending by building societies was still 57% lower than gross lending in May last year. Building society mortgage approvals were also at similar levels to recent months.

However, the £1,607m of approvals in May were still about 35% lower than the value of mortgages approved in May last year. Therefore, while the mortgage market appears to have recovered slightly from the start of the year, levels of activity remain depressed.

Adrian Coles, director-general of the BSA, said: "There is evidence that households are looking to repay debt rather than save, and it is possible that there will be a net withdrawal from the total UK savings market in 2009."

He added: "Overall, building societies offer attractive savings accounts are trusted by savers. As a result, societies have attracted substantial inflows since the financial crisis began."