According to its latest data, mutuals approved £2.1bn of mortgages in August, up 10% compared to July and up 17% on August 2010.
The data showed an 8% rise in gross mortgage lending in August to £2.1bn, against £2.0bn in August 2010.
The BSA said there was a 16% rise in mortgage approvals for the first eight months of 2011 at £14.6bn, compared to £12.6bn in the same period last year.
Adrian Coles, director-general of the BSA, said: “Lending by mutuals has held up well over the summer months. Approval figures continue to look promising as consumers take advantage of the competitive mortgage rates currently offered by mutuals.
“However, the outlook for the economy has deteriorated over the past month as has consumer confidence, which could well spill into the housing market, causing further weakness.”
Meanwhile, the Bank of England (BoE) reported 52,410 mortgage approvals last month, up 5% from July where the figure stood at 49,644. By value, loan approvals for house purchases rose from £7.0bn to £7.3bn in August.
The number of approvals for remortgaging increased by 9% from 31,652 in July to 34,668 in August. By value, remortgage levels rose to £4.3bn in July to £4.3bn in August.
Paul Hunt, managing director of Phoebus Software, said: “The fastest growth in August was for remortgage approvals which were up by 9%, as existing homeowners took the opportunity to lock themselves into low fixed rate deals. But lenders haven’t left those looking to finance new purchases in the cold either.
“House purchase loans were up 5% last month as the affordability of finance improved lenders’ confidence. Although there’s a very long way to go, the return of 100% mortgages and consistent lending at higher LTVs mean hoping for a market recovery in the next few months is by no means a pie in the sky.”
