Mortgage lending in August fell 12% from the figure in July and was 36% lower than a year ago, figures from the Council of Mortgage Lenders revealed.

The total amount of new money loaned was £21.8bn in July, the lowest monthly figure since April 2005 and lowest point for an August since 2002.

"These figures reflect the heightened uncertainty for both lenders and consumers in the mortgage market at present," said CML's director general Michael Coogan.

"Lenders are uncertain about future sources of funding and the cost of funding, while consumers are unsure about how much further and for how long house prices will continue to decline."