Mortgage lending dived to less than a 10th of the level seen during the previous month in September as activity in the housing market remained subdued, figures show.
Net lending, which strips out redemptions and repayments, totalled just £112 million during the month, down from £1.62 billion in August, according to the Bank of England.
Lending levels are unlikely to pick up going forward, with the number of mortgages approved for house purchase falling for the fifth consecutive month to 47,474 - the lowest level since February, which is traditionally a quiet month for the housing market.
The steep fall in net lending is likely to have been caused by a combination of a lack of activity in the property market and existing homeowners focusing on reducing their mortgage debt while interest rates remain low.
Earlier this week the British Bankers' Association said net mortgage lending by the major banks had fallen to its lowest level for a decade.
Potential buyers are continuing to stay away from the market as they wait for the outlook for both house prices and the wider economy to become clearer. But homeowners are continuing to put their properties up for sale, creating a mismatch between supply and demand and putting downward pressure on prices.
Vicky Redwood, senior UK economist at Capital Economics, said: "September's UK household borrowing figures provide more evidence - as if any were needed - of the problems in the housing market.
"The number of mortgage approvals edged down very marginally from their already exceptionally low level of 47,500. These low levels of activity now seem to be contributing to renewed falls in house prices."
The figures come the day after both Nationwide and the Land Registry reported house price falls, with Nationwide saying values dropped by 0.7% during October, while the Land Registry reported a 0.2% slide for England and Wales in September.
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Unsecured borrowing rose by £262 million during September, up on both the previous month's contraction of £21 million and the recent six month average. Within the total, consumers increased the amount they owe on credit cards by £185 million, while borrowing through loans and overdrafts rose by £77 million - the strongest increase since May.
