LONDON (ShareCast) - Tougher lending criteria, higher food costs, rising fuel prices and soaring utility bills caused a slump in mortgage lending last month to its lowest level since records began more than a decade ago.

New mortgage approvals sank to less than 28,000 in May from 34,752 the month before, according to the British Bankers' Association (BBA).

That's a 20% slump on the month and a 56% plunge on the same time a year ago. The figures also revealed that net mortgage lending dropped to £4bn during the month from £5.2bn in April.

"Measures of mortgage activity were lower in May as a result of tighter lending criteria and economic pressures on households," said BBA statistics director, David Dooks.

"Only remortgaging business is holding up, where people need or want to take advantage of deals with other lenders."

The number of homeowners remortgaging fell just 8% from April's 68,971 and 10% weaker than a year ago.

"People spent more on credit cards, but repayment levels were lower than expected in May and after April's busy month with people putting money into ISAs, personal deposits were not as strong," said Dooks.