THE buoyant mortgage market showed some signs of slowing down last month with lending falling following three months of record increases, figures showed yesterday.

Both the Council of Mortgage Lending (CML) and the British Bankers' Association (BBA) reported a drop in new borrowing during June.

The figures come as the Royal Institution of Chartered Surveyors said house price inflation looked set to slow down in the coming months as consumers appeared increasingly reluctant to meet the high prices demanded.

The CML said that the total new lending in June fell to £17.1bn, down on May's record of £20.3bn but still higher than the £14.9bn advanced in June last year.

The BBA reported that net lending, which takes into account redemptions and repayments, by the major banks was £4.15bn last month - the lowest increase for three months and significantly down on May's £5.19bn.

The BBA said the slowdown could have been caused by a combination of the golden jubilee bank holiday reducing the number of working days in June, first-time buyers being priced out of the market and a shortage of properties for sale.

BBA director of statistics David Dooks said that it could be the first sign of a slowing down of prices and borrowing demand to more "normal" levels.

He said: "It's a welcome sign it is in no one's interest to see the market getting out of hand."