By Claire West

Gross mortgage lending by mutuals was £2.0 billion in August, which is unchanged from the £2.0 billion lent in July. Mortgage approvals made in August amounted to £1.8 billion, slightly lower than the £1.9 billion in July.

Commenting on the figures, Paul Broadhead, Head of Mortgage Policy at the BSA, said:

"Both gross lending and mortgage approvals by mutuals in August broadly matched the year-high figures recorded in July, which is encouraging, particularly when assessed against wider industry trends. However, the market continues to show falling levels of demand and a flattening out of house price growth. With continued economic uncertainty, lending activity could fall back if buyer interest continues to show signs of weakness."

Savings balances held at mutuals decreased by £699 million in August, following a decrease of £1.0 billion in July. Excluding interest credited to accounts £1.0 billion was withdrawn in August, compared to £1.3 billion in July.

Commenting on the savings data, Brian Morris, Head of Savings Policy at the BSA, said:

"Households are facing a difficult economic environment which helps explain the withdrawal from savings accounts seen in August. Consumer prices are outpacing growth in average earnings and unemployment remains elevated. Also, the low Bank Rate is making it difficult to attract people who can afford to save when potentially higher, if more risky, returns are possible in the equity markets."