Mortgage lending fell back by 2 per cent during May, reports the Council for Mortgage Lenders.

This is despite a series of tenative signs of recovery in the market.

£10.3bn was loaned during the month, which was less than the £10.5bn in April and a huge 58 per cent lower than in May 2008, the CML said.

However, the CML pointed out that the fall was likely due to a drop off in remortgaging, which more than offset a slight rise in new mortage advances.