Net mortgage lending was just £1.8bn in April, down from £2.3bn in March and the lowest since February 2001, figures from the British Bankers’ Association show.
Gross mortgage lending of £8.2bn in April was lower than both March and the average in the previous six months – £9.1bn.
Repayments were stronger than usual as banks encouraged bor-rowers to use surplus cash to reduce their borrowing.
David Dooks, statistics director at the BBA, says: “Household priorities are clearly reflected in the latest figures, with individuals paying down their debt rather than building up savings, even in the traditional ISA season.
“Meanwhile, uncertainty about the impact of the government’s economic policies on households and businesses will continue to dent consumer confidence and influence decision-making.”