"It is likely that households will continue to re-evaluate their housing needs in the post-pandemic world, which will to continue to support demand into the new year."
Gross lending totalled £16.9bn in Q3, up from £13.9bn in Q3 2020.
During the third quarter, societies approved 109,575 mortgage loans, 4% more than in Q3 2020.
As a result, building societies now hold outstanding mortgage balances of £351.2bn, a 23% share of the total mortgage market.
Savings balances at building societies have grown strongly, increasing by £4.2 billion in Q3, three times the increase in the third quarter of 2020.
Andrew Gall, chief economist at the BSA, commented: “The strong level of mortgage lending activity in the third quarter by building societies, and across the wider market, suggests that the tapering of the stamp duty holiday has not been a major barrier to property purchase. It is likely that households will continue to re-evaluate their housing needs in the post-pandemic world, which will to continue to support demand into the new year.
“The Bank of England is sounding like it is ready to increase the Bank Rate from its historically low level of 0.1% over the coming months. Whilst this may see some mortgage rates rise, the vast majority of households are on fixed term products and so won't see any immediate change to their monthly repayments."