Gross mortgage lending was £7.6bn in June, lower than the recent six-month average and 11% lower than gross lending in June 2010.
However lending may have seen some growth in the buy-to-let market coming through.
Net mortgage lending increased by only £0.5bn in June with continuing weakness in both house purchase and remortgaging approvals said the BBA.
House purchase approvals increased 3% from May but were 6% lower than in June 2010. The average value (£149,700) was 0.6% lower than a year earlier.
The number of remortgage approvals in June was higher than the previous month though in line with the recent average, as expectations of interest rate rises in the near-term have receded. Remortgage approvals increased 9.6% from May and increased 10.8% from June 2010.
David Dooks, statistics director at the BBA, said: “Banks continue to lend for house purchase but the weak mortgage market is self-evident, although some growth is coming from the buy-to-let sector to meet demand for rental properties.
“Personal deposits are growing only slowly as some people may be using savings to pay higher household bills.
“Businesses, as has been seen elsewhere, are concerned about the economic outlook and, in weathering difficult trading conditions, they are putting off expansion or investment plans and limiting borrowing.”
Commenting on the data, Capital Economics said: “Despite June’s rise, mortgage approvals have remained broadly flat over the past year. With the squeeze on household incomes unlikely to ease anytime soon and with few signs of looser lending conditions in the mortgage market, it is difficult to foresee a marked improvement in housing market activity.”
