Gross lending by mutuals totalled £20.4bn in 2010 while mortgage approvals made by mutuals in December amounted to £1.2bn, compared to £1.9 bn in November.
Paul Broadhead, head of mortgage policy at the BSA, says that despite the drop in December lending remained stable in late 2010.
He says: “December is typically a quieter month for the mortgage market and a drop in approvals at the end of the year is not uncommon. It is likely, however, that the adverse weather conditions in the period contributed to a more significant decline in approvals than one would normally expect.”
Net lending by mutuals in December was £379m compared to £385m in November.
Savings balances held with mutuals increased by £1.5bn in December 2010, following an increase of £0.6bn in November.
Excluding interest credited to accounts, mutuals had a net receipt of £1.1bn in December.
Total balances at mutuals increased by £154m in 2010.
Brian Morris, head of savings policy at the BSA, says: “Savings balances at mutuals increased for a second consecutive month in December giving mutuals a strong end to the year.
“However, households face a challenging year ahead and may well need to dip into – or defer – savings to supplement their incomes. Growth of household savings balances is therefore likely to remain relatively subdued in 2011.”