Britain's building societies experienced a fall in lending last month and said activity is expected to remain low for some time due to the depressed state of the UK housing market, an industry expert has revealed.
According to the Building Societies Association (BSA), net lending stood at £125m in May, down from £666m in April and just one-tenth of the level from the previous year.
The lobby group said gross lending fell from £4.6bn in May 2007 and 3.6 billion in April 08 to £3.3bn last month.
"The figures reflect the considerable adjustment in housing market activity now being experienced," commented Adrian Coles, director general of the BSA.
"We expect activity to remain at low levels for some time," he added.
However, the BSA said that building societies continued to attract strong levels of savings, as consumers look to respond to an uncertain economic outlook by depositing more cash for safe-keeping.
Building societies reported net receipts of £853m in May, down from £1.8bn in April, but an increase on the £608m reported in the previous year and the highest total for May since 2002.
Major UK banks have also said they are attracting more savings as customers adopt a more prudent attitude.
Building Societies Suffer Loans Slump
Building Societies Suffer Loans Slump
Mon, 30 Jun 2008
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