Mortgage lending through building societies increased by 22% to £16.9bn in the third quarter compared to the same period last year when £13.9bn was lent, new figures reveal.

Data from the Building Societies Association show that members approved 109,575 mortgages in Q3, which was 4% higher than the number agreed in the same quarter of 2020.

Building societies hold outstanding mortgage balances of £351.2bn, which is equivalent to a 23% share of the total mortgage market.

The percentage share is unchanged from the last set of published BSA lending data which covered the first quarter of this year.

BSA chief economist Andrew Gall says: “The strong level of mortgage lending activity in the third quarter by building societies, and across the wider market, suggests that the tapering of the stamp duty holiday has not been a major barrier to property purchase. 

“It is likely that households will continue to re-evaluate their housing needs in the post-pandemic world, which will continue to support demand into the new year.

“The Bank of England is sounding like it is ready to increase the bank rate from its historically low level of 0.1% over the coming months. 

“While this may see some mortgage rates rise, the vast majority of households are on fixed term products and so won’t see any immediate change to their monthly repayments.

“Savings balances have also grown at building societies in the period and it’s particularly pleasing to see an inflow to cash ISAs, despite a £3.6 billion outflow across the market.”