Officials say building societies still in good shape

Over recent weeks there have been a number of reports claiming that building societies are finally feeling the pinch that has resulted from the global credit cards crunch, with increased demand and decreased funding affecting their ability to operate to full capacity. These reports claimed that many building societies had been forced to cut back on lending, withdraw various deals from the shelves, and restrict new lending altogether or just to local applicants.

However, in one recent report officials from the Building Societies Association have stated that despite these cutbacks the UK’s building societies remain in good shape and are not struggling as a result of the global credit crunch that has affected so much of the financial sector within the UK. The Association said that building societies had been inundated with applications from those that could not get finance through banks or did not want to go through the bigger banks.

One official from the Building Societies Association said: “I don’t think they’re struggling, in fact very much the opposite. Building societies aren’t the only organisations out there that are cutting back on lending, competitors are as well. Just because they’re restricting lending doesn’t mean that they’re struggling.”

However, despite what the BSA has stated a number of building society officials have commented in recent reports, stating that lending had to be restricted because finance had become more difficult and more expensive to obtain, and in the current financial climate it was too difficult for them to keep up with demand. The BSA said that the success of building societies was based on the amount of money that people deposited by way of savings accounts, and the more people saved the better position building societies would be in to lend money.