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In its latest statistics for June, the BBA found house approvals had plummeted to a further record low, particularly for house purchase.

While gross lending in June rose by £3.8bn, this was still 5 per cent lower than in May and 23 per cent less compared with June 2007.

The number of approvals for house purchase totalled 3.3 billion in June, compared with 4.2 billion in May and is 66.4 per cent lower than the same period a year ago.

Approvals for remortgaging accounted for a record 55 per cent of all mortgages compared with just 19 per cent for house purchase.

Approvals for equity withdrawal and other purposes remained similar to the previous month.

David Dooks, statistics director for BBA, 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 per cent over the past year and there continue to be significant numbers of people remortgaging with the 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."