Research by the British Bankers’ Association said that gross mortgage borrowing offered by major banks reached £7.7bn in January, down from £8.4bn recorded in December but in line with the last six months of 2012.

This meant annual growth rates slowed to just 0.2% during the first month of this year, falling from a high of 4% in January 2010.

Mortgage approvals for house purchase were also substantially down year-on-year, falling 14%. The BBA blamed inclement weather conditions for this slump but added that a rise in first-time buyers in the past year would have a positive effect later in the year.

Remortgaging figures were also unimpressive in the opening month of 2013 with approvals down 28%.

BBA statistics director David Dooks blamed snowy weather across much of the UK for the quiet January market.

David Brown, commercial director at LSL Property Services, said: “Lending remains above the average of the last six months despite the arctic weather, but we are also seeing a cautious approach to mortgage debt taken by many current borrowers.

“Not only will this have the impact of softening the financial blow when the base rate does rise, but these borrowers will have built more equity and will be able to take advantage of better rates at lower LTVs when they do remortgage.”

Chris Love, mortgage broker at Mortgage Simplicity, added: “The Funding for Lending Scheme (FLS) has definitely kickstarted the market. Two, three and five-year average fixed-rate mortgages are now at their lowest level since their launch in 1989, with record-beating rates arriving daily in some cases.

“The effect of the scheme is still being felt most in the low loan-to-value sector, but it is certainly now working up to higher loan-to-value offerings.”

Mark Harris, chief executive of SPF Private Clients, said: “Last year, net borrowing was largely flat as borrowers continued to overpay on their mortgages where possible, while new lending remained muted.

“This trend is likely to continue as borrowers exercise caution when taking on new borrowing, while low interest rates mean savings are earning such poor returns that homeowners are choosing to pay down the mortgage instead.”