According to the British Bankers Association, net mortgage lending by the banks was up £1.8bn in April compared with an increase of £2.3bn the previous month and £2.7bn for the six months ending April 2010, on average.
Gross mortgage lending by the banks fell 5 per cent over April to £8.2bn compared with the £8.7bn recorded for March and 9 per cent compared with an average of £9bn for the six months to April.
The BBA says repayments were stronger than usual as banks actively encouraged borrowers to use surplus cash to reduce their borrowing.
The number of mortgage approvals in April were 3 per cent lower than in March at 75,429 and 6 per cent lower than the 80,205 average of the past six months. House purchase approvals increased month-on-month but remortgage approvals dropped 11 per cent from 24,215 in March to 21,580 in April.
BBA statistics director David Dooks says the data reflects household priorities, with people paying off debt rather than building up savings.
He says: “Uncertainties about the impact of government policies and the economy on households and businesses will continue to dent consumer confidence and influence decision-making.
“Overall lending to companies remains subdued, although the annual rate of contraction appears to have bottomed out.”