New figures show that building societies increased their mortgage balances by £7.5 billion to £493 billion in the six months to September.
Today’s half-year results from the Building Societies Association also include loans from two jointly owned banks: Virgin Money, now owned by Nationwide, and The Co-operative Bank, now part of Coventry.
The BSA The results show that mutuals hold 29% of outstanding mortgage balances in Britain and accounted for 32% of net lending in the period.
More than 220,000 new mortgages were approved, representing 31% of all market approvals.
Building societies provided 59,8612 mortgages to starters in the six months.
Over the six months, investment funds grew their savings by £8.8 billion to £496 billion.
The BSA says building association members received an extra £4 billion in additional benefits last year compared to the rates and benefits offered by banks.
It says mutuals are working hard to maintain their presence on the high street as many banks close branches.
A number of building societies are opening new branches and sharing their space with local charities and community groups, it says.
Building societies account for 35% of all shopping streets, compared to 14% in 2012.
BSA chief executive Robin Fieth said: “Consumers are increasingly looking for providers that provide long-term value, fairness and inclusive access to services in their communities.
“These latest figures show that building societies continue to meet that demand, supporting people to buy their first home and helping households build their financial resilience.
“As member-owned organisations, our focus is on delivering real benefits to consumers and ensuring value stays within local communities, rather than being sent to external shareholders.
“While banks are withdrawing from the high street and cutting back on the local services that communities depend on, building societies are doing the opposite – not just keeping branches open, but investing in them and opening new ones.”
He added: “Last week we launched the Building Society Sector Growth Plan, calling on the government and regulators to implement capital reforms that would unlock the sector’s full potential.
“These changes will enable building societies to help even more people buy their own homes, safeguard their savings and strengthen communities across the UK.
“We are not asking for special treatment, but for recognition of the vital role that building societies play in ensuring that Britain has a diverse and competitive financial services market and the ability to realize the sector’s full potential.”