May net lending suffers dramatic slowdown - BoE

Within that figure, the increase in net lending secured on dwellings was £0.3bn which was lower than the April increase of £0.9bn and the previous six month average.

The twelve-month growth rate fell by 0.2 percentage points to 1.3% and the three-month annualised growth rate fell to 0.6%.

The number of loans approved for house purchase rose to 43,414 from 43,191 in April. However, approvals for remortgaging of 30,984 and for other purposes of 27,933 were lower than April figures and below the previous six-month averages.

Simon Rubinsohn, Royal Instituion of Chartered Surveyors (RICS) chief economist, says:  "Bank of England data suggests that mortgage approvals for house purchases only rose modestly in May.

"At first glance, this appears slightly at odds with the BBA figures published last week but a more detailed examination of numbers helps to explain the apparent inconsistency. While mortgage approvals by banks actually rose by around 2,500, loans from building societies and other specialist lenders both fell during the month."

He adds: "Meanwhile, remortgaging activity hit a new low in May. This may reflect, in part, a degree of satisfaction with the low Standard Variable Rate mortgages that many homeowners have moved on to as existing products terminate.

"It could also capture the difficulty other borrowers, who have slipped into negative equity as a result of price house declines, are facing in finding a more attractive alternative offering."

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