Mutuals took a 24% market share of gross lending in July, up from 17% in July 2011, and had a 21% share of lending in the first seven months of the year.
The number of mortgages approved by mutuals, which represent the future completions pipeline, was up 32% in July compared to the same month last year. Mutual lenders approved 26% of all mortgage loans in the UK in July, and 24% in the first seven months of the year.
Retail savings balances at mutuals rose by £1,247 million in July 2012, compared to an increase of £575 million in the same month last year. After interest credited is removed there was a net receipt of £1,058 million in July.
Adrian Coles, director-general of the Building Societies Association, said: "Mutuals are currently enjoying a sustained increase in lending activity, and an increase in deposits from savers.
"Lending activity by mutuals has been growing strongly on a year on year basis for some time now, and in July gross lending rose again by a healthy 44%.
“At the same time lending by banks fell by 9% in July. As a result mutuals continue to take market share, up to 24% in July, well above the 17% figure for the same month on 2011.
“Approvals by mutuals were also up in the month and this means that this trend of increased lending is likely to continue.
“The Funding for Lending scheme has not influenced these figures and may not start to for a number of months yet.
"Savings balances at mutuals increased by over £1 billion in July, up considerably compared to the same month last year and June 2012.
“Whilst this is positive news for mutuals, savings flows are quite variable month by month, and it is difficult to draw firm conclusions from one month's figures. Growth in consumer prices is still running above growth in earnings and so saving for many households remains challenging."
Ben Thompson, managing director Legal & General Mortgage Club, said: “The latest figures released by the BSA reveal that Building Societies have increased lending by 44% compared to the same point last year, with the number of mortgage approvals rising to 26% in July, an increase of 32% compared to July 2011.
“Over the last three months especially, Building Societies have really led the market in terms of innovation in mortgage products, and we have seen interesting deals including Leeds’ two year fixed rate on 80% LTVs, which rivals many mortgages offered with LTVs of 75% and 70%.
“A lot of these products have been aimed specifically at first time buyers, which is where we really need to see a boost if we are to head toward recovery.
“The mortgage market as a whole needs to be opened up, with lenders moving to accommodate the borrowers who have so far been under-serviced. At the minute, this is largely FTBs and those deemed to be ‘riskier’ customers. Whilst lending rates are enjoying periods of historic lows, it is significantly harder to secure a loan now than it has ever been previously.
“Whilst Building Societies should be commended for the moves they’ve made to stimulate growth in the industry, we still need to see other lenders following suit by moving up the ‘risk curve’ and helping to increase the overall level of lending.”