The mortgage lending provided by building societies is stabilising, new figures suggest.

According to the Building Societies Association (BSA), gross mortgage lending provided by such organisations was just under £2 billion in June this year.

This was a rise of 30 per cent compared with May and was the highest amount recorded of any month up to that point this year.

However, the figure is still more than 30 per cent down on the same time in 2008, the BSA pointed out.

The association also found that, in terms of savings, building societies saw a net withdrawal of over £2 billion in June this year, compared with a net inflow of £419 million in June last year.

Brian Morris, head of savings policy at the BSA, said: “Households are looking to take advantage of the low interest rates to pay off debt rather than save. These conditions are expected to persist into 2010.”

Recently, Paul Samter, economist at the Council of Mortgage Lenders, said that the UK’s housing market remains “sluggish” as a result of lending constraints and continuing deterioration in the labour market.