The UK housing market is experiencing growing stress as mortgage lending has collapsed to the lowest monthly level on record, according to the latest figures from the Bank of England.

The Bank reported that borrowing of mortgage debt fell sharply in April, with consumers repaying £1.4bn more than was taken out in new lending on the month.

This is the lowest level since records began in 1993, excluding the Covid pandemic.

The figures reflect the central bank's most aggressive round of interest rate increases in decades, which has started to impact the property market.

The Nationwide building society also released data showing that house prices fell in May at an annual rate of 3.4%, representing the sharpest fall since July 2009.

Martin Beck, chief economic advisor to the EY Item Club, said, "The numbers point to a housing market struggling in the face of pressure on household finances and higher mortgage rates.

And rates could head up further, putting more pressure on housing market activity." The Bank reported that net mortgage approvals for house purchases fell from 51,500 in March to 48,700 in April, while remortgaging approvals increased slightly from 32,200 to 32,500.

The effective interest rate – the rate paid by consumers – on newly drawn mortgages rose by 5 basis points to 4.46%.

Banks and building societies have pulled almost 800 residential and buy-to-let mortgage deals in the past few days and warned homeowners looking for new mortgage deals to prepare for fixed rates above 5% in the coming weeks.

Nationwide said that house prices had largely remained flat over the past month after seasonal effects were taken into account, taking the average price of a home in the UK to £260,736.

However, the building society warned that the housing market was facing "headwinds" that would increase in the coming months.

Robert Gardner, the Nationwide chief economist, warned that interest rates would remain high for longer than previously expected.