According to the latest data from the British Bankers’ Association (BBA), June’s mortgage lending rose by £3.8bn which is weaker than May’s figure of £4.5bn but, on the upside, annual mortgage lending rose by 11.9%.

David Dooks, BBA statistics director, said: “Another record low number of mortgages approved by the banks for house purchase means that the whole market is likely to be at its least active since the early 1990s. However, even in this rapidly slowing market, net lending has still grown by 12% over the past year and there continue to be significant numbers of people remortgaging with banks. The pressure on household finances is being reflected in subdued consumer borrowing, with spending on cards lower than of late and borrowing on personal loans and overdrafts being comparatively weak.”

Simon Rubinsohn, chief economist for the Royal Institution of Chartered Surveyors (RICS), believes that the continuing lack of availability of mortgage finance is proving a major drag on the level of property transactions and is increasingly being felt in the real economy.

He said: “The modest cuts in the cost of borrowing seen over the past few weeks will unfortunately provide little relief for first-time buyers. Indeed, the fact that Tim Besley, a member of the Monetary Policy Committee (MPC), actually voted for a hike in interest rates at the latest MPC meeting suggests that it is premature to expect the Bank of England to provide any support anytime soon. This highlights the need for the Government to think creatively both in terms of stamp duty reform and the provision of mortgage finance which is currently being reviewed by Sir James Crosby.”