Activity in the housing market failed to pick up during May with the number of mortgages approved for house purchase remaining broadly unchanged, figures showed today.
A total of 49,815 loans were approved for people buying a property during the month, down on both the average for the previous six months and the recent peak of 59,338 reached last November.
Total mortgage advances reached their highest level this year at £12.29 billion, according to the Bank of England.
But lending was still down on the levels reached in the final months of last year when people buying lower-value properties rushed through purchases before the end of the stamp duty holiday.
Net lending, which strips out redemptions and repayments, was up on the previous two months at £1.18 billion, but was also down on the levels reached in the final quarter of 2009.
The housing market got off to a slow start at the beginning of the year due to a combination of the end of the stamp duty holiday, severe winter weather and uncertainty caused by the general election.
But activity has failed to pick up, despite these one-off factors no longer having an impact on the market, leading economists to speculate that the recovery is faltering.
Howard Archer, chief UK and European economist at IHS Global Insight, said: "The Bank of England reported that mortgage approvals were essentially only stable at a muted level in May, thereby reinforcing the impression that housing market activity is finding it hard to regain momentum after faltering at the start of 2010.
"The data ... provides further support to our suspicion that house prices will struggle to make significant gains over the coming months."
Vicky Redwood, senior UK economist at Capital Economics, said the figures provided further evidence that the housing market recovery was "flagging".
She said: "There are also now tentative signs that the increase in prices is running out of steam. We still think that the market will weaken in the second half of this year."
The number of people remortgaging fell further during May, with just 25,759 people switching to a new deal as most homeowners continue to be better off staying on their lenders' standard variable rate.
But there was a slight pick up in the number of people releasing equity from their home or taking out a buy-to-let mortgage at 24,656.
Unsecured lending rose slightly during the month, with outstanding debt increasing by £331 million, after contracting by £114 million in April.
Within the total, outstanding credit card debt rose by £138 million, while borrowing through loans and overdrafts rose by £193 million.
Building societies continued to have a difficult time during May, with net mortgage lending by the sector contracting for the 17th consecutive month, as homeowners repaid £588 million more than they borrowed.
There was also a fall in the amount of money people had deposited with building societies, following a rise in April.
Consumers withdrew £576 million more than they saved with mutuals during May, according to the Building Societies Association (BSA).
Adrian Coles, director-general of the BSA, said: "It is perhaps unsurprising that there will be outflows in some months given the low level of the Bank rate and as savers look to pay down debts or seek greater returns from higher risk investments."