But for 2009 as a whole gross lending was half the levels seen in 2008, going from £37.5bn in 2008 to £18.6bn last year.
Paul Broadhead, head of mortgage policy at the BSA, says:“Whilst it is encouraging to see an increase in gross lending at the end of the year when activity would typically decline, we believe it is likely that this rise can be attributed to a rush from buyers keen to complete transactions before the year end in order to beat the removal of the stamp duty holiday.
“Despite this rise, total gross lending in 2009 was only half of that in 2008 and it is likely to remain at low levels until funding conditions improve.”
Net lending by building societies in December fell to -£283m from a positive £273m at the same time in 2008.
Approvals in December rose to £1.04bn from £901m a year earlier.
Deposits held at building societies increased by £15m in December.
Excluding interest credited to accounts, building societies had a net withdrawal of £400m in December.
Total balances at building societies reduced by £1bn in 2009 compared to an increase of £19bn in 2008.