By Lea Pachta

Gross lending by mutuals increased to £1,597 million in March, up 36% compared to £1,174 million in February.

Approvals were also stronger at £1,677 million compared to £1,389 million in February – a 21% increase.

Commenting on the lending figures, Adrian Coles, Building Societies Association (BSA) Director-General, said:

“Lending activity appears to have gained some momentum following a sluggish start to the year, and the relatively strong approval figures bode well for coming months.

However, the mortgage market will remain fragile as there is uncertainty in relation to employment, interest rates, house price inflation, mortgage availability and, conceivably even after the election, the political outlook.”

In the savings market, balances held in savings accounts at mutual institutions increased by £534 million in March compared to an increase of £807 million in February. If interest credited to accounts is excluded, mutuals had a net withdrawal of £318 million February.

Commenting on the savings figures, Mr Coles said:

“Savings balances grew for the second consecutive month in March, although mutuals saw a net withdrawal if interest is excluded, having seen a net receipt in February. The mutual sector continues to offer some of the most consistently competitive savings rates, but people may instead consider making additional mortgage payments or using savings to support their incomes in this challenging economic climate, or they may be looking to invest in the equity markets.”

Mutual statistics March 2010

Data below are not seasonally adjusted.

– Mutuals’ gross lending amounted to £1,597 million in March 2010 compared to £1,174 million in February.
– Net lending by mutuals in March 2010 was -£764 million compared to -£863 million in February.
– Approvals by mutuals in March 2010 were £1,677 million compared to £1,389 million in February.
– Mutuals had a net withdrawal of £318 million in March 2010 compared to a net receipt of £623 million in February.
– Including interest, savings balances at mutuals increased by £534 million in March 2010 compared to an increase of £807 million in February.
– Mutuals had a net receipt of £210 million into cash ISAs in March 2010 compared to a net withdrawal of £109 million in February.

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