Building societies have recorded a larger growth in mortgage business than banks, accounting for 72% of all growth in the sector.
According to the Building Societies Association (BSA), mortgage balances across mutuals increased by £11.7bn in the six months to September.
During this period, over 63,000 first-time buyers were supported, which the BSA said demonstrated the innovative efforts of building societies to find solutions for aspiring homeowners.
Some three-and-a-half million people have got a mortgage from a building society, and in the last three years, this has included 307,500 mortgages to first-time buyers.
Further, 44% of all residential lending from building societies was to first-time buyers.
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250 years of building societies
This year also marks 250 years since the first known building society was established in 1775 at the start of the Industrial Revolution, when people moved to towns and cities for work but found there was not enough availability of housing, leaving people to live in overcrowded homes.
It is said that the landlord of the Golden Cross Inn in Birmingham decided to address this problem by getting customers to pool their savings. When there was enough money, this was used to purchase land and build a home. They continued to save until everyone in the group had built a home for themselves. This is said to be the first-ever version of a building society.
Today, mutuals hold £395m in residential mortgages, making up 24% of all outstanding in the UK. The BSA represents all 42 building societies in the UK, mutual-owned banks and seven of the largest credit unions.
Robin Fieth, chief executive of the BSA, said: “We start our 250th year with a fantastic commitment from the government to double the size of the mutual and cooperative sector. This recognition that our business model is different and benefits consumers presents a unique opportunity to place building societies at the heart of Britain’s economy.
“Today’s building societies have never lost sight of their purpose. They will continue to tackle the challenges of low household financial resilience and difficulties in achieving and maintaining homeownership with innovative and customer-focused products and services.”
He added: “It feels like this is our time, and I’m in no doubt that there will still be building societies providing a safe home for savings and the means for ordinary people to buy their own home in another 250 years.”
