MORTGAGE APPROVALS FALL

By: bsa.org.uk

• Building society gross advances amounted to £3,772m in April 2007, compared to £3,512m in April 2006.
• Net advances were £1,031m in April 2007, versus £1,106m in April 2006.
• Approvals were £3,910m in April 2007, down from £4,248m in April 2006.

• Building societies had net receipts of £1,351m in April 2007 compared to net receipts of £1,330m in April 2006.
• Building society net receipts to cash ISAs were £1,773m in April 2007, compared to £1,452m in April 2006. This is a 22.1% increase year on year.

Commenting on the mortgage market, Adrian Coles, Director-General of the BSA said:

"Gross advances were the highest April figure for three years. However, net advances were down slightly on the same month last year. Approvals (loans agreed but not yet made) fell by 8% compared to April 2006. This is the first year on year fall since July 2005 - the month preceding the last cut in interest rates.”

“The lending figures suggest that the effects of the four rate rises since August 2006 are beginning to show. However, with the reasonably strong economic outlook, we expect lending to remain robust throughout the remainder of the year, although another interest rate rise could dampen growth further.”

Commenting on the savings figures, Mr. Coles said:

“With net receipts into societies increasing only slightly by 1.6% compared to April 2006, it is clear that the rate rises are having only a limited effect encouraging extra saving. This is likely to be a result of the squeeze on household finances, with the 2006 rise in disposable income the smallest since 1982. This has been exacerbated by high inflation and the interest rate rises leading to higher debt servicing costs. Against such a background, it is imperative that people ensure that their finances can withstand any further increase in interest rates."

~Ends~

1. The Building Societies Association (BSA) represents all 60 building societies in the United Kingdom. Building societies have total assets in excess of £310 billion and hold residential mortgages of almost £210 billion, approximately 18% of the total outstanding in the UK. Societies hold almost £200 billion of retail deposits, accounting for about 19% of all such deposits in the UK. Building societies also account for over 37% of all cash ISA balances. Building societies employ almost 50,000 full and part-time staff and operate through around 2,150 branches.
   
2. Photographs of Adrian Coles are available from the BSA press office http://www.bsa.org.uk/mediacentre/contacts/spokespeople or Headline Money http://www.headlinemoney.co.uk/Home.asp?nSection=1

3. CONTACT: NEIL JOHNSON
   DIRECT LINE: 020 7440 2260
   EMAIL: neil.johnson@bsa.org.uk

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