Mutuals approved 31% of home loans in the third quarter at 126,000 – up 10% from the same period a year earlier.
And lent a similar proportion of first-time mortgages in the market, amounting to 30,000 loans.
Overall, the providers accounted for 33% of the growth in the mortgage market in Q3 2018, with net lending of £3.9bn.
Over the 10 years since the financial crisis, net lending from building societies stands at £105.4bn, almost half of the whole market total.
However, Paul Broadhead, BSA head of mortgage and housing policy warned that politics is now dampening the market.
He said: “Brexit-related uncertainty is having a growing negative effect on home-buying and mortgage activity.
“Remortgaging remains the only part of the market that is growing and many buy-to-let borrowers are refinancing.
“Especially for those with small buy-to-let portfolios, the implication of the tax changes will only really be felt as they complete their next tax return.
“First-time buyers are still active, but numbers are subdued and it’s unlikely that this part of the market will pick-up substantially in the short-term.”