Building Societies To Save The Mortgage Market?

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The banks are still in deep freeze when it comes to lending, they simply will not budge for many borrowers – so should we be looking to the UK's building societies to help us get the mortgage credit we need?

It might be that the safe, sensible bankers who work in the mutual sector have come out of the economic crisis better than ever. Some building societies did suffer and unfortunately fold, but the large majority have kept up their ethic of lending out only what their members have deposited.

One example is Wales' largest building society, Principality. It has reported a 187% increase in the number of borrowers taking out a mortgage in the first three months of this year, compared with the same period last year.

In fact, it said that February marked its biggest ever volume of mortgage applications since November 2007 – prior to the onset of the credit crunch – with lending for the month stretching over £143m.

Graeme Yorston, chief operating officer of Principality, says: "These figures are a good sign of the gently recovering confidence in the housing market. The average mortgage rate has been steadily decreasing since the middle of last year and this, coupled with more affordable house prices has encouraged a healthy mix of buyers."

So should all borrowers be flocking to their building society? Not necessarily – while it's great that the building societies are still offering mortgages, it might be that the best loan for you is a loan from a bank or a specialist non-bank lender. By talking to a professional mortgage broker you can find out where the best mortgage for you is being lent and what you need to do to get it.

SOURCE: Principality, 09/04/10

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