The Building Societies Association (BSA) has released data showing that building society lending was up 33% in Q1 2021 compared with Q1 2020.
The association said this was largely driven by the expectation that the stamp duty holiday would end on its original deadline of the end of March 2021.
Mortgage lending in Q1 2021 was also up 13% on Q4 2020.
Gross lending by building societies in Q1 2021 stood at £17.9bn up from £13.5bn in the same period of 2020, and up from £15.9bn in Q4.
During Q1, societies approved 118,843 mortgage loans, 18% above the number for Q1 2020 (100,919), but slightly down on approvals in Q4 2020 (121,761).
Building societies currently hold outstanding mortgage balances of £342.5bn, a 23% share of the total mortgage market.
Building Societies lent to 26,000 first-time buyers in Q1 2021.
Robin Fieth, chief executive of the BSA, said: “The housing and mortgage markets remained at full tilt throughout the first three months of the year as buyers rushed to take advantage of the stamp duty holiday that was originally scheduled to finish on 31 March.
“It seems increasingly clear that for some, the prospect of sustained home working has prompted moves to homes that are better suited, often outside cities.
“Although the full stamp duty holiday ends on 30 June, the tapered extension for properties up to £250,000 until the end of September in England and Northern Ireland will continue to support much of the market outside London and the South East.
“A levelling-off in house price growth would be welcome, particularly for younger buyers who continue to struggle to raise the necessary deposit or meet the regulatory affordability criteria.
“With interest rates likely to remain low for some time, a reduction in the mandated 3% stress test would be welcome, although a thorough assessment of a borrower’s ability to repay remains essential.
“Although most borrowers who took advantage of a mortgage payment deferral have resumed payments, a small proportion are in longer term financial difficulty even before the government support schemes like furlough finish.
“Lenders will continue to offer tailored forbearance, but it is inevitable that repossession will be the only possible alternative for some, although it remains an absolute last resort for lenders.
“We have been urging the government to do what they did in the financial crisis and reduce the waiting time for government help through the Support for Mortgage Interest Loan [SMI] from 39 weeks to 13.
“Repossession brings dislocation and distress – the very last thing that promotes economic recovery.
“SMI also represents far better value to the taxpayer than rehousing costs and housing benefit.”