Brian Murphy, head of lending at Mortgage Advice Bureau, said: “The main reason was the fewer trading days. The one-off Jubilee celebrations and extra bank holidays saw a lot of people extend their break to take a full week off. On top of this…was the terrible weather; the effect of which needs to be fully understood.”

Data from over 500 brokers and 800 estate agents presented in the latest National Mortgage Index, produced by the Mortgage Advice Bureau, showed that the total number of mortgage applications is now just 6.9% higher than last year.

Murphy said as a result of the wider economic situation people are feeling less confident about their personal finances, so fewer mortgage applications.

Remortgage applications were also down 30.5% in May. Applications for purchase business mirrored this trend, down 19.4% compared to the previous month.

However, the average deposits on purchase applications continued to rise at an increase of 18.4%, reaching £66,512 in June, up from £56,167. Rates have also increased, up 0.45% since January at a rate of 4.72%.

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Murphy said: “Month by month the levels are likely to fluctuate. New figures from the IMP and the ITEM Club among others suggest the UK will return to growth in the second half of the year, albeit at a lower level than first predicted.”

He added: “The new Funding for Lending scheme proposed last week looks promising. If lenders can be reassured there is no stigma with signing up to the scheme then it could inject up to £80bn into the lending market.”

However, after the Olympics and the usual summer lull, Murphy expects the next few months to be fairly steady, and pick-up in the autumn.