Building societies seem to be back in vogue among UK homebuyers, according to research by Octane Capital. 

The company analysed gross lending figures to see how building societies have fared when compared to other avenues of lending in recent years. 

The research found that gross lending via building societies was £68.9bn in 2018, accounting for 25.6% of total mortgage lending that year. However, this figure then declined by 6.2% to £64.6bn in 2019, with mortgage sector market share also falling to 24% of total lending. 

During the initial pandemic year of 2020, a further 17.1% decline brought building society lending down to £53,5bn, accounting for just 21.8% of total lending seen across the market. 

However, in 2021, gross lending for building societies climbed by a notable 33% on an annual basis and the £71.3m lent to the nation’s homebuyers was the highest total seen over the previous five years, accounting for 23.1% of all mortgage lending. 

In 2022, it’s estimated that this level of gross lending will see a further 6.3% jump totalling £75.8m, accounting for almost 24% of all mortgage lending, suggesting that the building society is very much back in favour among the nation’s homebuyers.

Jonathan Samuels, CEO of Octane Capital, commented: “Since the outbreak of Covid 19, there’s been a rising number of self-employed people, as well as an increased number of those with thin or poor credit files. We’ve also seen a greater need than ever for lending with regard to both first-time buyers and downsizers. 

“These niche consumers often tend to struggle when it comes to obtaining a mortgage via a big bank and this has presented building societies with the opportunity to recarve a niche and return to their bread and butter proposition. 

“Should they continue to serve a distinct purpose within the lending sector, we can expect to see further growth over the coming years.”