The trade body reported that 32,000 borrowers were granted loans from mutual organisations in the five months to the end of May, a rise of 50% compared to the same period last year.

Loans to buyers with a deposit of 10% or less increased from 3,400 to 8,900 year-on-year

Separate figures released by the Bank of England show that £14bn of gross lending was made by building societies, banks and other lenders in May. Building societies accounted for a quarter of this total figure (£3.3bn) while banks lent £12.7bn during the month.

Paul Broadhead, head of mortgage policy at the BSA, said: “Building societies and other mutual lenders continue to play a dominant role in supporting members of the UK public looking to buy a new home.

“Supporting first-time buyers is very much part of the sector’s ethos and in the first five months this year the number of loans to this group jumped by 50 per cent compared to last year. Importantly, as deposits remain a clear barrier to home ownership, building societies and other mutuals have made over two and a half times as many loans to first time buyers with a deposit of 10 per cent or less.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Mortgage approvals continue to improve, both for new purchases and remortgages. This is entirely what you would expect given the plethora of rock-bottom mortgage rates now available.

“However, while the numbers continue to rise, they are still well below what they were at the peak of the market before the crisis. The health of the housing sector is showing a slow and steady improvement but it is by no means out of intensive care just yet.”

Brian Murphy, head of lending at Mortgage Advice Bureau, added: “With almost 6,000 more house purchase loans approved in May compared to February, we’ve seen a surge of enthusiasm from buyers, brokers and lenders that has swept the cobwebs away from the property market over the last three months.

“Adverse credit has really impacted consumers’ options since the credit crunch, but as conditions improve there are some options available even for those with a less than perfect credit history or adverse circumstances. Although the rates offered to them will be higher than the norm, we’re currently basking in the glow of a historic low for average rates across two, three and five year fixed products.”