They lent £68.9bn in mortgage finance, according to the Building Societies Association (BSA), with net lending rising by 12 per cent to £17.9bn. This represented 39 per cent of market growth compared to 34 per cent the previous year.
In the three months to December 2018, gross lending rose to £18.4m – an increase of around 3m on the same period the previous year – and up from £17.9m in Q3 2018.
Across the year, new mortgage approvals increased by eight per cent on 2017, from 442,996 to 476,803. They represented 31 per cent of all mortgages approved in 2018, compared to 29 per cent the previous year.
One in three mortgages approved in 2018 were for first time buyers.
There was, however, a reduction in the number of mortgages approved in the final quarter of 2018, with the figure dropping from 126, 457 in Q3 to 116, 938. But this was still an increase on the final quarter in 2017.
Around 23 per cent of all outstanding mortgage balances are held by building societies, a total of £322.3bn, compared to £298.7bn at the end of 2017.
Housing market remains subdued
Robin Fieth, chief executive at the BSA (pictured), said that building societies performed strongly in the final quarter of 2018, adding to a robust performance for the year as a whole which was delivered despite challenging market conditions.
He said: “The housing market was and remains subdued, with little growth except in remortgages. Here homeowners have been locking into deals while interest rates stay low, to provide some financial stability in uncertain times.
“Mortgage product innovation remains a strength for the sector, together with the more personalised approach to mortgage underwriting.
“The strong finish in Q4 bodes well for lending early in 2019, subject to the outcome of Brexit and consumer sentiment in the run-up to 29 March.”
Savings within the mutual sector also grew despite the BSA noting that for much of 2018 wage increases were eroded by inflation, making it harder for households to save.
“Savings growth across the market was relatively flat but building societies grew their share of the increase in balances from 19 per cent in 2017 to 31 per cent in 2018,” Fieth added.