BSA: Lending set to 'cool'

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BSA: Lending set to 'cool'

Mon 23rd Apr 2007

Loans to individuals from building societies could be set to "cool", despite new figures indicating a lending surge in the first quarter of 2007.

Research carried out by the Building Societies Association (BSA) indicates that net advances to individuals amounted to £1.84 billion, more than double the £815 million during the same period the previous year.

According to Adrian Coles, director general of the BSA, with the £4.83 billion of approved loans being 12 per cent below the average for the three months prior, "lending may be beginning to cool".

Mr Coles also said that while a mooted further interest rate rise could take "further heat out of the housing market later in the year", it could also encourage a saving mentality among Britons.

According to the group, savings in building societies was 93 per cent higher in March 2006 than during the same period the previous year, "but pressures on take-home pay may limit the amount that households are able to put away", Mr Leonard added.

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