New figures released today by the Building Society Association (BSA) reveal that gross mortgage lending in Q1 2023 was £13.9bn, a 23% decrease compared to Q1 2022, which stood at £17.9bn.
The report also indicates that building societies approved 85,234 mortgage loans during the first quarter of this year, marking a 24% drop from the 111,723 mortgage loans approved in Q1 2022.
However, there has been an improvement compared to the last quarter of 2022, with the current number of approvals showing a 13% rise from the 75,758 mortgage loans approved in Q4 2022.
The total outstanding mortgage balances held by building societies are currently £370.0bn. This figure has seen a 3% increase from Q1 2022, when the outstanding balances were £358.2bn, representing a steady 23% share of the total mortgage market.
The number of first-time buyers receiving loans from building societies was also highlighted in the report. A total of 21,498 first-time buyers were granted loans in Q1 2023, marking a 16% decrease from the 25,735 loans made during the same period in 2022.
Robin Fieth (pictured), chief executive of the BSA, said: “The drop in gross mortgage lending compared to the same period last year reflects the impact on the housing market caused by the economic slowdown.”
Fieth also drew attention to recent tentative signs of recovery, said: “Activity in March showed tentative signs that the market is recovering, with mortgage loan approvals 13% higher than in the final quarter of 2022.”
However, he warned of continued weakness in lending volumes due to higher interest rates and increasing strains on household finances due to the rising cost of living.
He further reassured that building societies remain ready to provide a non-judgemental environment and tailored support for borrowers who may be concerned about making their mortgage payments amidst the tightened household budget.
