UK building societies enjoyed record cash inflows during March, research has claimed, demonstrating the sector's resilience to the credit crunch.
The sector took some £1.26 billion in net receipts a record for the month of March, and up from just £0.7 billion during the same period of 2007.
This represents an increase of 70 per cent.
"Against the current uncertain economic climate, building societies are seen as tried and tested, traditional and trusted. Together with the competitive rates of interest they offer, these attributes mean societies continue to attract record levels of savings," explained Adrian Coles, director-general of the BSA.
Building societies receive up to 70 per cent of their funding from the retail market, and thus have been able to largely circumvent the problems seen in wholesale markets.
High street lenders drawing their funds from wholesale markets have suffered in recent months as the London Interbank Offered Rate (Libor) remains decoupled from the base rate, forcing the cost of borrowing upwards.
"Building societies have never relied on wholesale funding to the same extent as many other lenders, and these substantial saving inflows indicate that building societies are less exposed to the restricted availability of wholesale funds than other lenders," continued Mr Coles.
Building society gross lending amounted to £3,631million in March 2008 compared to £5,439million in March 2007.
Net lending by building societies in March 2008 stood at £580million compared to £1,791million in the same month last year.
"Lending at building societies was down year on year. This is partly due to building societies withdrawing products and increasing rates on new lending so that they do not become overly competitive," said Mr Coles.
As other lenders withdrew from the market, some building societies were found to be offering the best rates, becoming swamped with applications.
As a result, many were forced to limit lending in order to guarantee service.