There was £2.1bn of mortgages approved by mutuals in August, up 10% compared to July and up 17% on August 2010.
Commenting, Adrian Coles, director-general of the BSA, said: “Lending by mutuals has held up well over the summer months and in August gross lending reached an 11 month high. Approval figures continue to look promising as consumers take advantage of the competitive mortgage rates currently offered by mutuals.
“However the outlook for the economy has deteriorated over the past month as has consumer confidence, which could well spill into the housing market, causing further weakness.
“Labour market conditions continue to be difficult, and inflation relatively high, so the relatively strong levels of savings at mutuals may well reflect households pulling out of equity investments in the face of continuing volatility in the markets.”
