Mortgage lending during August dived to a 10-year low for the month as activity in the housing market remained “exceptionally” weak, figures showed today.

A total of £11.4 billion was advanced during the month, 14 per cent down on July’s figure and the lowest level for August since 2000, said the Council of Mortgage Lenders.

The group warned that the market was heading for a “difficult” second half of the year, with lending volumes likely to remain below the level seen during the last months of 2009, when activity was buoyed as the end of the stamp duty holiday approached.

The news came as figures from property website Rightmove showed that house prices fell for the third month in a row during September, with estate agents continuing to have record levels of unsold stock on their books.

The average cost of a home put up for sale in England and Wales during the five weeks to September 11 dipped by 1.1 per cent to £229,767.

New sellers have now dropped their asking prices by 3.4 per cent, or more than £8,000, during the past three months, wiping out half of the gains made during the first half of the year.

The dip in asking prices led to a further fall in the annual rate of house price inflation, which eased to 2.6 per cent, down from 4.3 per cent in August.

Today’s figures are the latest in a run of gloomy data on house prices, which have prompted some economists to warn the market is heading for a double dip.

But Rightmove pointed out, that although asking prices were falling and there was a shortage of buyers able to go ahead with a purchase, the number of properties coming on to the market had also eased during the month.

By David Burrows