Building societies took a market share of 28 per cent of new mortgage approvals in the third quarter of 2020, new figures show.

The sector approved 111,800 new mortgage loans in the period, up 5 per cent on the 106,200 loans approved in Q3 2019.

The total value of outstanding mortgage balances held by building societies is £338bn, 23 per cent of the market and up 1 per cent on Q3 2019.

However gross lending by building societies was down 9 per cent on Q3 2019 to £14.6bn in the same quarter this year.

Net lending was £1.2bn, down 43 per cent compared to the £2.1 bn in Q3 2019.

Building Societies Association head of mortgage policy Paul Broadhead says: “It has been a turbulent year for the mortgage market, with transactions collapsing due to the lockdown in March, but approvals for house purchase recovering to 10 year highs in the third quarter, as pent up demand was released and buyers rushed to take advantage of the stamp duty holiday.

“Building societies have been able to support homebuyers during this period, approving 28 per cent of all new mortgage loans in the third quarter of the year.

“Although the housing and mortgage markets are buoyant at the moment, and the wider economy has recovered somewhat, we are far from out of the woods. Around 9 per cent of the workforce (3.3 million jobs) are currently being supported by the furlough scheme, and only once this and other government support has ended will the long-term impact of coronavirus be fully understood.  We are also concerned about the cliff edge effect of the abrupt end of the stamp duty holiday on 31 March and have called on the government to taper its removal to lessen market impact.

“If borrowers find themselves in financial difficulty whether due to the coronavirus, or any other reason, we encourage them to contact their lender before they miss a payment to discuss the options available to help them, including the mortgage payment deferral scheme and other tailored support.”