Press Release Summary: The building societies are loosing their grounds in the loan market due to the global credit crunch.
Press Release Body: London (Shakespearefinance) July 02, 2008: Loan transactions by building societies slumped in June and is expected to remain low for the next six months due to the depressed state of the realty market. This shocking fact was revealed by the industry\'s lobby group on Monday. Net lending of the Building Societies across the United Kingdom was 125 million pounds in May. However this amount was much lower compared to the 666 million in April and is just one-tenth of the level in 2007.\"The figures reflect the considerable adjustment in the UK realty market activity now being experienced. It is expected to remain at low levels for some time,\" said Adrian Coles, Director General of the Building Societies Association.
Earlier, building societies used to attract strong levels of savings. However this situation is taking an U-turn, as consumers deposit more cash in the face of a tough economic scenario. In May 2008, Building societies had net receipts of 853 million pounds. This figure is lower compared to 1.8 billion in April but up from 608 million in May 2007 and is the highest total for the month of May since 2002.
The BSA said more Britons appeared to be responding to an uncertain economic outlook (credit crunch and increasing inflation rate) by saving more. Major banks have also said their savings pool is increasing as customers adopt a more prudent attitude.
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