The October figures show that gross mortgage lending by building societies and other mutual lenders was up by 29% compared to October 2011.
This equates to an increase of £3.0 billion in October.
Total gross lending in the first ten months of the year was £25.6 billion, up from £19.1 billion in the same period last year.
Mutuals enjoyed an increased market share at 24% of gross lending in October, up from 19% in October 2011.
They approved 25,000 loans in October, which is up 24% compared to the 20,100 in October last year.
Adrian Coles, Director-General of the Building Societies Association, said: "The lending figures are further evidence that building societies and other mutuals are lending more to those looking to buy a home.
“Mutuals have accounted for 86% of all net lending in the UK in the year to October, which significantly outperforms other financial institutions. Around one in three loans made by mutuals are to first-time buyers.”
Mr Coles attributed this to the more competitively priced products that mutuals were offering.
The average mortgage rate offered by mutuals in October was 4.18% compared to 4.39% across the market.
He added: "Savings balances at mutuals fell marginally in October. Households are still facing headwinds such as above-target consumer price inflation which increased unexpectedly to 2.7% in October.
“According to the Bank of England inflation is now unlikely to fall back towards its 2.0% target until the end of 2013. Conditions in the labour market are however improving, which should help alleviate some pressure on household budgets."
