Figures released by the Building Societies Association (BSA) showed that net lending fell by almost 90% since May 2007.

The Building Society Statistics for May showed that net lending by building societies reached a historic low of £125m in May, which is an annual fall of £1,137m from May 2007 when net lending was £1,262m. However, the monthly figures were not quite so bleak. Net lending fell for the fourth consecutive month to May’s figure of £666m in May.

The figures also showed the number of approvals for building society lending. There were 2,337 approvals in May which was a significant fall from April with 848 less approvals. The number of approvals is now at its lowest point for the last two and half years as it is currently 55% lower than its peak of 5,243 in March 2007.

A spokesman for BSA told PIN: “We are looking at a very different housing market than what we have experienced over the last 10-15 years. The full impact of the credit crunch needs to be assessed before these figures can truly be interpreted. It is impossible to tell whether the fall in net lending is an anomaly. It will take a few more months to be able to see whether lending will remain this low.”