Gross mortgage lending by the high street banks totalled £7.6bn in May, down 13% compared to May 2010, research from the British Bankers’ Association shows.
The annual growth of the banks’ net mortgage lending was 2% in May, remaining ahead of the 0.7% for the whole of the mortgage market in April.
House purchase approvals were slightly higher than in April but 15% lower than in May 2010.
The average house value stood at £147,700, 1.9% lower than a year earlier.
The numbers of remortgage approvals in May were slightly higher than the previous month but well down on earlier in the year, as expectations of interest rate rises in the near-term appear to have receded.
Approvals for equity withdrawal continue to be subdued and were 20% lower than May 2010.
The BBA says that despite the weakness in both house purchase and remortgage approvals gross mortgage lending is largely stable, but with repayments continuing at a fairly high level, net mortgage lending increased by only £1.2bn in May.
David Dooks, statistics director at the BBA, says: “Consumer spending was flat in May after the boost Easter and the Royal Wedding provided in April. Money is still tight and people continue to pay off debt rather than save or borrow.”