Its figures showed that 1,693 mortgages worth £1.69bn were approved by mutual lenders during February compared to 1,379 mortgages worth £1.38bn for the same period last year. Approvals were also up notably on January’s total of 1,123.

Gross mortgage lending by mutuals reached £1.49bn in February compared to £1.17bn in February 2010.

Net lending by mutuals in February 2011 was -£614m compared -£864m in February 2010.

Adrian Coles, director-general of the BSA, said: “Mortgage lending by mutuals continues to grow from the low levels seen last year. The good financial results released recently by many mutual lenders show that they are strongly placed to offer attractive products to homebuyers.

“However, activity in the housing market remains at levels that are subdued relative to previous periods, as potential buyers continue to have concerns about the economic outlook.”

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