Gross lending totalled an estimated £21.8bn in August, a -12% fall from July and a -36% fall from August 2007, according to the Council of Mortgage Lenders (CML).

This is the lowest monthly figure since April 2005 and the lowest August figure since 2002. Exceptionally low housing market turnover and lower than anticipated remortgaging activity will keep monthly lending subdued in the immediate future.

Michael Coogan, CML director general, said: “These figures reflect the heightened uncertainty for both lenders and consumers in the mortgage market at present. Lenders are uncertain about future sources of funding and the cost of funding, while consumers are unsure about how much further and for how long house prices will continue to decline.”