Building society lending soars 15%

Gross mortgage lending by building societies jumped 15% to £1.8bn between November and December, figures released by the Building Societies Association (BSA) show.

Paul Broadhead, BSA head of mortgage policy, says it is encouraging there was an increase in gross lending at a time when activity historically declines.

However, he adds: "We believe it is likely that this rise can be attributed to a rush from buyers keen to complete transactions before the year end in order to beat the removal of the Stamp Duty holiday."

Despite the rise in December, total gross lending in 2009 totaled £18.6bn, which was only half the £37.5bn achieved in 2008.

Approvals in December 2009 were £1,038m compared to £901m in December 2008.

In the savings market, balances held in savings accounts at building societies increased by £15m in December. Excluding interest credited to accounts, building societies had a net withdrawal of £0.4bn in December.

The BSA admits it is difficult to make direct comparisons with previous years' data because Britannia is no longer classified as a building society after it merged with Co-operative Financial Services in August 2009.