Gross mortgage lending by building societies and other mutual lenders was £4.0 billion in July, up 30% on July last year, and the highest monthly figure since data was first published for the mutual sector at the start of 2010, according to latest figures from the Building Societies Association (BSA).

The value of mortgage approvals in July also reached the highest level since 2010 at £4.2 billion compared to £2.8 billion in July last year.

In the first seven months of the year gross lending by the sector was £22.2 billion, up by 30% compared to £17.1 billion in the same period last year. This gives mutuals a 24% market share of gross lending in the year to July, up from 21% in the same period in 2012.

Lending to first time buyers has accounted for around 30% of lending by mutuals since the start of the year, with more than a quarter of that to first time buyers with a deposit of 10% or less.

Net new mortgage lending (gross lending minus repayments) by mutuals was £1.3 billion in July and £6.8 billion in the first seven months of the year which is greater than the total net lending by the sector across the whole of 2012.

Retail savings balances at mutuals rose by £0.7 billion in July and by £5.7 billion in the first seven months of the year. In the first seven months of 2012 balances at mutuals rose by just £0.8 billion.

Brian Morris, head of savings policy at the BSA, said: “The figures for July confirm that the mutual sector continues to perform strongly in both of its core markets, mortgage lending and retail savings.

“In the mortgage market, net lending by the sector was £6.8 billion in the seven months to July, whilst net lending by other institutions, such as banks, has been in negative territory. Mutuals are increasing their lending to the real economy, helping to boost economic activity in the UK.”