For those in the process of saving a deposit towards a mortgage, it will be interesting to note that it appears building societies have benefited greatly since the banking crisis has hit.
According to figures from the BSA (Building Societies Association), more than a million customers opened a new savings account with a building society in 2008.
Banks such as Northern Rock, Royal Bank of Scotland, Lloyds/HBOS and the Icelandic banks have all hit the headlines as they have struggled with the credit crunch, leaving building societies to scoop up the savers deposits.
When comparing December 2008 to January of the same year, an additional £9.9 billion was being held by building societies. In addition, the BSA stated that from the start of the credit crunch in September 2007 up to December 2008, an addition £20 billion in net receipts were received by building societies compared to just £11.9 billion from the 16 months previous to this.
Commenting on the figures, Adrian Coles, director-general of the BSA, said
“The low interest rates that we currently have reduce the incentive to save, but the popularity of building society savings accounts is such that an additional 1.2 million accounts were opened over the last twelve months.”
With interest rates so low, customers are searching out the best interest rates, particularly if they are trying to save for something important such as a deposit for their mortgage.
Those taking CeMAP training in order to become a mortgage advisor will have noted that although low interest rates mean that there are some good mortgage deals available for those with a deposit but for those still saving up to get a mortgage, they will need to ensure they are getting the most from their savings.