Building society gross advances amounted to £4,636million in May 2007, compared to £4,613million in May 2006, while net advances were £1,261m in May 2007, versus £1,527million in May 2006.
Approvals were also down, with £4,739million in May 2007 down from £5,454million in May 2006.
Adrian Coles, director-general of the BSA, commented: "It has been a slow start to the summer. Building society mortgage lending is down year-on-year, as the interest rate rises since August last year have started to take the heat out of the mortgage market.
"New lending (net advances) fell year on year by 17 per cent, having been buoyant since summer last year. Similarly approvals, loans agreed but not yet made, a good indicator of what will happen in the market over the next few months, were down year-on-year by 13 per cent, having fallen year-on-year in April by 8 per cent.
"There is likely to be more subdued lending as the year progresses and the rate rises continue to feed through. Another rate rise would add to the slowdown later in the year and into 2008. However, a reasonably strong economic outlook, especially continuing robust employment, should provide support to lending and property prices."
