New figures have suggested that the credit crunch has hit the UK’s building societies even harder than the major banks whose cautious approach since the sub-prime crisis has been so well documented. However, it appears building societies are being even more cautious, with lending in March down from £1.8 billion in 2007 to just £580 million in 2008. That 68 per cent decline is also indicative of how much harder it has become for homeowners to secure loans, with building societies now twice as reluctant to approve an application compared with previous years.
The home loans market has suffered heavily as a result of the credit crunch, with Bank of England figures showing the home loans market to have shrunk by 40 per cent in the last year. Building societies have been one of the reasons behind this, with a particular eagerness to reduce their share of net lending.
Building Societies Cut Down on Loan Lending
Wed, 07 May 2008
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