Its figures revealed that gross mortgage lending was also notably up year-on-year in December, totalling £2.1bn – an increase of 15% on the previous December’s £1.8bn.
In addition, mortgage approvals by mutual were up 19% to £23.1bn in 2011, with £1.8bn of home loans approved in December – 49% up on the same period of 2010.
However, the BSA said that, while it was pleased with 2011’s results, 2012 will likely prove a “flat and difficult” year, with intense competition between banks and building societies for retail deposits.
Savings balances held with mutuals rose by £4.0bn in 2011 compared to an increase of £0.2bn in 2010, while net withdrawal was £0.1bn over the year compared to £3.7bn the previous year.
However, while concerns over further consolidation in the mutual sector remain, the BSA said it did not believe there were any likely mergers “imminent”, but would not rule the possibility out for the year.
Adrian Coles, director-general of the BSA, said: “Activity in the housing market has been weak throughout 2011, with the number of transactions close to an all-time low. New lending by mutuals, however, rose 16% in 2011 compared to 2010, whilst the UK’s major banks recorded a small reduction in lending over the same period.
“The housing market faces significant headwinds over the coming 12 months, but mutuals are poised to take on these challenges and continue to offer market leading rates and innovative products to home movers and first-time buyers alike.”
