Gross mortgage lending by building societies and other mutual lenders was £2.5 billion in February, up by 29% compared to the same month last year. Mutuals took a 23% market share of gross lending in February, up from 18% in February 2012. Net mortgage lending (gross lending minus repayments) by mutuals was £515 million in February, up from £67 million in the same month last year. Mutuals approved a total of 24,295 loans in February, up 16% compared to the 21,020 in the same month last year and higher than the 20,979 loans approved in January.

Retail savings balances at mutuals increased by £0.7 billion in February, compared to a reduction of £0.1 billion in the same month last year.

Commenting, Paul Broadhead, Head of Mortgage Policy at the Building Societies Association, said: “Building societies and other mutual lenders continued to show their commitment to UK homebuyers in February.  Both gross and net mortgage lending rose in a market where lending by other institutions remained weak. We welcome the Government’s renewed focus on the challenges faced by people looking to buy for the first time or move home, but it is a shame that the Help to Buy guarantee is needed.  If all lenders acted to help first-time buyers and other creditworthy borrowers with smaller deposits, as mutuals have done consistently over the last year and more, this intervention would not be needed. Around one in three mortgages from BSA members are already to first-time buyers, many at higher loan to value ratios.  The sector is in a strong position to lend in 2013.

“Savings balances held by mutuals increased in February, compared to a slight reduction in the same month last year. This is encouraging but household budgets remain under significant pressure. Consumer price inflation increased in February to 2.8%, well above wage increases. With CPI inflation forecast to reach 3.0% this year, growth in savings balances is likely to be subdued.”