Building societies ‘saving more, lending less’

Savings deposits to building society accounts increased by 70 per cent over the past year, it has been revealed.

The Building Societies Association (BSA) found that inflows reached £1.26 billion last month, compared to £0.7 billion in March 2007.

BSA director-general Adrian Coles claimed the figures prove that building societies are “tried and tested, traditional and trusted” savings accounts providers which offer competitive interest rates.

Building societies gross lending amounted to £3,631 million last month, down from £5,439 million during the same month in 2007.

Mr Coles attributed the decrease to withdrawals of products and increasing interest rates.

“Furthermore, this may also be due to a greater level of uncertainty in the housing market causing prospective buyers to hold back until the direction of house prices becomes a little clearer,” he added.

Newcastle Building Society has revealed that 11 per cent of people prefer to save their cash at home rather than in an account, up from four per cent last year.

© Adfero Ltd

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