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Mortgage lending 'should continue at building societies'

Mortgage lending 'should continue at building societies'

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Building societies are well placed to continue approving mortgages for its customers despite the credit crunch problems, one expert has stated.

Neil Johnson, public relations and policy manager for the Building Society Association (BSA), remarked that although building societies may be cutting back on the amount they are lending, they are in a strong position.

His comments follow news that the Bath, the Earl Shilton, the Newbury, Melton Mowbray and the Tipton & Coseley all restricted or halted new mortgage lending, the BBC reported.

"Unlike a lot of their PLC competitors, [building societies] are very successful at getting funding and that actually puts them in a very good position to continue lending," Mr Johnson said.

He added that building societies must choose to lend "appropriately" as they are using funds from their customer's savings.

Figures from the BSA show that only 50 per cent of funding received by building societies is from the wholesale market.

Your home may be repossessed if you do not keep up repayments on your mortgage.

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