Adrian Coles, director general of the Building Societies Association, said: 2007 was a bumper year for building society savings. The majority of the deposits came in the latter months of 2007, so a significant proportion is almost certainly funds withdrawn from Northern Rock bank. However, a substantial amount is also likely to be from households increasing the amount they save in preparation for a more uncertain year ahead. With competitive interest rates on offer and uncertain times in the equity markets, building societies continue to be an attractive home for people’s savings.
Gross lending by building societies was almost flat year on year, at GBP52.1 billion in 2007, compared to GBP52.8 billion in 2006. However, net lending by building societies as down by 20.7% to GBP12.6 billion in 2007, largely because of higher interest rtes in the mortgage market as a whole.
