RTTNews - U.K.'s building societies approved mortgages worth GBP 1.6 billion in May, up from GBP 1.5 billion approved in April, the Building Societies Association or BSA said Monday. However, it was significantly down from GBP 2.47 billion granted in the same month of the previous year.

Building society gross lending was GBP 1.51 billion in May, compared to GBP 3.53 billion in the previous year and GBP 1.55 billion in April. Net lending by building societies was minus GBP 752 million after minus GBP 722 billion in April.

While the mortgage market appears to have recovered slightly from the start of the year, levels of activity remain depressed, Adrian Coles, Director-General of the BSA said.

Including interest credited, savings balances held by building societies decreased by GBP 106 million in May, compared to a GBP 1.16 billion increase in the same month of the previous year.

There is evidence that households are looking to repay debt rather than save, and it is possible that there will be a net withdrawal from the total UK savings market in 2009, Coles said.

Building societies had a net withdrawal of GBP 494 million, compared to net receipt of GBP 855 million in May 2008.

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