Building societies' mortgage balances grew in the six months between October 2023 and March 2024, when they had declined across the rest of the market. At the same time, building societies have grown their savings balances and their service levels have again outperformed those at the banks.

Building societies support homeowners

After a slowdown in the housing market in 2023, new mortgage approvals have picked up in recent months supported by strong wage growth, falling inflation and higher levels of consumer confidence. 

The latest lending data shows that mortgage balances at building societies increased in the six months to March 2024 by £8.6 billion. In the same period, mortgage balances at other lenders reduced by £10.0 billion. This continues the trend seen throughout 2023 where building societies accounted for all the growth in the mortgage market. 

Building societies’ lower risk approach to lending decisions is reflected in the latest arrears data where 0.25% of building societies balances were in arrears at the end of Q4 2023, compared to 0.69% across the total market. 

Building societies support first-time buyers

Building societies raison d’etre is – and has been for almost 250 years - to help people into homeownership, as well as providing a safe home for their savings. A number of building societies have introduced new and innovative ways to support people into homeownership, and in the six months to March 2024 they have helped 49,844 first-time buyers to buy a home of their own. This accounted for 37% of all residential building society lending.

Building societies support savers

Despite the ongoing cost of living challenges, the savings market has grown during the six months to March 2024. Building societies continued to offer competitive rates throughout this period and attracted £14.7 billion in cash savings, accounting for more than one third (35%) of all savings. Savings balances at banks and other deposit takers increased by £27.0 billion. 

Building societies continue to encourage savers to check their savings interest rates. In recent analysis, building society savers received £2.1 billion more in interest than they would have got at the big banks over 2023, showing how shopping around can make a sizeable financial difference.

Building societies support customers

In the latest YouGov customer service survey, building societies once again outperformed their banking competitors in various customer service metrics. 

92% of building society customers agreed that their provider gives good customer service, compared to 87% of bank customers. The survey also reported that around three quarters (75%) of building society customers said their building society is an important part of the community, considerably higher than the 49% of bank customers. 

Building societies key statistics - October 2023 to March 2024

• Gross mortgage lending £31.3 billion, 30% market share of all lending 

• Net lending £8.6 billion whereas balances at other lenders dropped by £10.0 billion

• 191,241 mortgage approvals, 36% market share of all approvals

• Supported 49,844 first-time buyers get on the property ladder, accounting for 37% of all residential building society lending.

• Savings balances increased by £14.7 billion, 35% share of all savings growth

• 92% of customers agreed that their building society offered good customer service, compared to 87% of bank customers.

• 86% of customers agreed that their building society offered competitive rates, compared to76% of bank customer

Notes on the data

• Building society sector data is based on returns made to the BSA by building societies, and comparisons made with the rest of the market are calculated using the Bank of England’s total market data. Data tables can be found on the BSA website here.

• Branch data is compiled by the BSA from its member ILMA24 building societies, bank websites, open data, Link data on branch closures and other data sources, collated February 2024.

• Mortgage arrears figures exclude loans in arrears of less than 2.5% of the outstanding balance. Mortgage arrears exclude securitised loans. Building society arrears data is calculated from a sample of building societies and so does not fully reflect the whole building society sector.

• All customer service survey figures, unless otherwise stated, are from YouGov Plc.  Total sample size was 2,022 adults. Fieldwork was undertaken between 17th – 18th April 2024.  The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+). Excludes respondents who said ‘don’t know.’ Calculations undertaken by BSA.

Ends

Press contacts:

Tanya Jackson, tanya.jackson@bsa.org.uk Tel: 07881 501098
Katie Wise, katie.wise@bsa.org.uk Tel: 020 7520 5904

Notes to Editors:

1. The Building Societies Association (BSA) represents all 42 building societies, as well as 7 of the larger credit unions. Building societies serve around 26 million consumers across the UK and have total assets of over £515 billion. Together with their subsidiaries, they are helping over 3.5 million families and individuals to buy a home with mortgages totalling over £385 billion, representing 24% of total mortgage balances outstanding in the UK. They are also helping over 23 million people build their financial resilience, holding over £385 billion of retail savings, accounting for 19% of all cash savings in the UK.  Within this, societies account for 40% of all cash ISA balances.

2. With all of their headquarters outside London, building societies employ around 51,500 full and part-time staff.  In addition to digital services they operate through approximately 1,300 branches, holding a 28% share of branches across the UK. 

Appendix

Net lending in six months to March 2024

Net lending by building societies was positive in all of the six months. Total net lending was £8.6 billion.

Net lending by banks was minus £10.0 billion.
 

Savings balances in the six months to March 2024

Building society savings balances increased by £14.7 billion. 

Bank balances have increased by £27.0 billion