According to the Bank of England the figure, which strips out redemptions and repayments, plummeted from £1.79bn to £690m in that time.

That was the second lowest figure ever recorded and represents just half of the level analysts had predicted.

Mortgage lending has fallen from a peak of about £10 billion per month at the height of the market.

In January of 2008, net mortgage lending was 10 times higher than January this year - £6.91bn.

 But the total number of approvals for home loans was largely stable at around 31,000 in January, the Bank said.

Data from Hometrack suggest the average price a property achieves is now 88% of its initial asking price, as househunters hold out for bargains in the expectation of further property price falls.

But Hometrack's figures also point to tentative green shoots of recovery, with new buyer registrations rising by 17% and agreed sales up by 36% in February, after falls in the previous few months.