Building society withdrawals hit record levels
With news that building society withdrawals hit a massive £2.2 billion in June there was initial concern that the so-called safe haven status afforded to the building society sector was in danger. However, the record £2.2 billion of withdrawals in June, compared to a £419 million inflow last June, appears to be the result of more and more people deciding to pay off their mortgages. So will this trend continue?
The building society sector believes that with unemployment increasing and uncertainty regarding the short-term performance of the UK economy, more and more people are using their savings to pay off as much of their mortgages as possible. In an attempt to reduce the pressure in the medium term many people seem willing to forego interest on their savings, which when you compare mortgage rates against savings rates is perhaps not a bad idea.
Interestingly mortgage lending in the UK building society sector increased to £1.98 billion in June, which was up 30% on the previous month, but well below the £3.25 billion reported at the same time last year. It does seem as though the initial nerves regarding the UK building society sector, which came about after the collapse of the Dunfermline building society, have subdued somewhat and investors seem a little calmer today.
Share this..
Related stories
Northern Rock Ex-Management Face Possible Legal Action
In a move which will be welcomed by many investors and economists it seems as though the ex-management of the fallen Northern Rock may face legal action for their part in the run on the bank. It seems as though the present management, led by Ron Sandler, has initiated lawyers to consider whether there is some kind of case against the former directors and the way the business was run.
Read More
Scottish executive under pressure as more job losses announced
When contact lens maker Bausch and Lomb today announced 500 job losses in West Lothian it is clear that nobody in the Scottish parliament expected this. The company is effectively transferring production from West Lothian to the US and Ireland as it looks to consolidate in these difficult economic times. However, a number of Scottish MPs are now calling on the Scottish executive to step in again a...
Read MoreRichard Branson shows his hand in banking sell-off
Flamboyant businessman Richard Branson has today confirmed that he would "be interested in looking at" UK banking assets which may or may not come onto the market over the next four years. It would appear that his off-shoot Virgin Money is considering potential offers for Royal Bank of Scotland, Lloyds bank and Northern Rock assets which look almost certain to head for the open market in the short...
Read MoreUK dividends down 15% on average in 2009
In a reflection of the state of the UK economy and the UK stock market it has been revealed that the average dividend paid by companies in the UK fell by 15% in 2009. This equates to £57 billion which is around £10 billion less than the corresponding figure in 2008 and an obvious disappointment for investors in the UK. While the figure of 15% is enough to grab the headlines, when you consider...
Read MoreRecession Watch : Savings rates
One of the worst hit sectors of the UK over the last few months has been the saving sector. Many people have literally been forced to spend their nest eggs as opposed to living off their interest as they had done in the past. A large number of banks have reduced their savings rates to near 0% and those offering anything like a competitive rate want you to lock your money in for a substantial perio...
Read More