LONDON (Reuters) - Lending by building societies slumped last month and is expected to remain low for some time due to the depressed state of the housing market, the industry's lobby group said on Monday.

The Building Societies Association (BSA) said net lending was 125 million pounds in May, down from 666 million in April and just one-tenth of the level a year earlier.

"The figures ... reflect the considerable adjustment in housing market activity now being experienced. We expect activity to remain at low levels for some time," said Adrian Coles, director general of the BSA.

Gross lending was 3.3 billion pounds last month, down from 3.6 billion in April and 4.6 billion in May 2007.

Building societies continued to attract strong levels of savings, however, as consumers deposit more cash in the face of a tough economic outlook.

Building societies had net receipts of 853 million pounds in May, down from 1.8 billion in April but up from 608 million in May 2007 and the highest total for May since 2002.

The BSA said people appeared to be responding to an uncertain economic outlook by saving more. Major banks have also said they are attracting more savings as customers adopt a more prudent attitude.

(Reporting by Steve Slater; Editing by Quentin Bryar)