Building society lending slumps

According to a recent report building society lending levels slumped in May, and industry officials predict that it could remain slow for some time, largely as a result of the slowing housing market. The data comes from the Building Societies Association, which shows that lending from building societies came to £125 million in May, which was a fall from £666 million in April.

The net lending levels from building societies in May amounted to just one tenth of the amount lent in May of last year. One official said: “The figures … reflect the considerable adjustment in housing market activity now being experienced. We expect activity to remain at low levels for some time.”

According to officials from building societies consumers are trying to save more money as a result of the turbulent financial markets, and a number of banks have also said that they have seen deposit levels rise as a result of consumers trying to save more money.

Building societies have stated that whilst the level of borrowing has fallen significantly over the past month, the deposits received at building societies have increased, as prudent savers try and get more money in savings in order to provide more financial security in the current uncertain financial markets.