However, gross secured lending during the periods remained broadly the same with an average monthly net lending flow by UK-resident mortgage lenders standing at £1.8bn.
Which has prompted Brian Murphy, head of lending at Mortgage Advice Bureau, to warn that the market is “finely balanced at the halfway point of 2014”.
He said: “On the one hand, interest rates are creeping upwards, homes for sale are scarce and new measures are keeping lending activity in check.
“On the other hand, the clock is ticking down on cut-price borrowing and aspiring buyers will be conscious that their mortgage costs may be significantly lower if they can buy before rates – and house prices – climb any higher.
“Despite all the speculation, buyers should keep a clear head given that rate rises are likely to be fractional at best. There will certainly be no overnight shock and there is still plenty of time to seek advice on securing a good deal.
“The inevitable change in the Bank Base Rate also means that remortgaging will become an active consideration for many borrowers who have been comfortable until now on their existing deals.
“Consumer interest in remortgage deals has been growing steadily in the past year, and we may well see a shift in the balance of lending activity later this year from purchase to remortgage.”
The BoE also analysed SME lending over the three month period to may had returned to a positive flow following on from a disappointing previous quarter.
But Stephen Johnson, managing director, Commercial Mortgages, Shawbrook Bank, said there needs to be changes in the way lenders interact with SMEs.
He said: “Last quarter’s growth in lending is positive but to see a real shift, lenders need to make sure the way they interact with SMEs fits the business requirements of a small business.
“Talking to our brokers and clients we know how important a rapid response is. If you are a small business that has just won a new order and need new equipment to be on site in two days, there is value for you in a bank that can turn the decision round within a couple of days or sooner.
“You also need to ensure that your lender understands your business model properly so you receive the right decision. If small companies aren’t confident that their needs will be met, they won’t apply for finance.
“They need to know the full breadth of options out there and they key role that brokers can play in identifying the best lender for them.”
