The BSA revealed that mutuals took a 21% market share of gross lending in January up from 18% in January 2012.
Net mortgage lending by mutuals also increased totalling £394m in January compared to £16m in the same month last year.
Paul Broadhead, BSA head of mortgage policy, said: “Mortgage lending by building societies and other mutual lenders continued to grow in January, whilst lending across the rest of the market remained roughly flat.
“This follows a year in which the sector grew its mortgage lending by 30% and helped over 65,000 first-time buyers.
“A number of societies have just released strong financial results for 2012 showing they are in a good position to lend in the coming year.
Broadhead added that the number of mutuals signed up to the Bank of England’s Funding for Lending Scheme will also assist the sector to provide mortgage finance at competitive rates to homebuyers.
Stephen Williams, head of the building societies practice at Deloitte, echoed Broadhead’s comments: “The financial results from a series of building societies indicate that each had a successful year and that mutuals continue to thrive.
“The upward trend in gross lending continues from 2012 - where gross mortgage lending by societies and mutuals hit £30.7 billion, up by 30% compared to 2011 – and is set to continue this year."
Williams said that the increase in lending by mutuals and societies has significantly contributed to upsurge in lending to first-time buyers.
He added: “This was the first time that there were more than 200,000 first-time buyers in one year since 2007.
“It was also part of a wider shift from an emphasis on remortgaging in 2011 to more home buying activity in 2012, and I expect this trend to continue this year.”
