Mortgage lending took a pause in May amid signs that the pace of the housing market recovery is softening, banks and building societies have reported.

Some £16.5 billion-worth of home loans are estimated to have been handed out last month, identical to the total value of mortgage lending in April, the Council of Mortgage Lenders (CML) said.

Despite holding steady month-on-month, the CML said lending is still running at "substantially" higher levels than a year ago, with May's figure standing at around 12% higher than the value of mortgages handed out in May 2013.

CML chief economist Bob Pannell said reports of a recent slowdown in housing market activity have been linked to toughened mortgage lending rules which came into force at the end of April, adding: "It is unclear how lasting this will be."

He said the recent "softening in the pace of recovery" would appear to back up reports that demand in London, where the market has been at its most heated, is starting to cool.

The new Mortgage Market Review (MMR) rules mean lenders have to grill mortgage applicants more thoroughly about their spending habits, to make sure that their repayments will be affordable, both now and when interest rates eventually rise.

Writing on the CML's website, Mr Pannell said: "Implementation of the new regulatory regime is likely to have disrupted the normal patterns of activity, creating statistical 'fog' around the published figures.

"As this lifts over the coming months, a clearer picture as to any lasting impact of the MMR rules on lending activity should emerge."

Average UK house prices have hit a new peak of £260,000 after leaping by 9.9% over the last year, according to figures released by the Office for National Statistics (ONS) this week.

But in a sign of what is to come, property website Rightmove also reported this week that it is seeing evidence that house-sellers' asking prices are starting to come "off the boil", with property values in some parts of London appearing to have hit the ceiling of what buyers will pay.

Rightmove said the MMR rules have already dampened housing market demand, with estate agents reporting that some lenders are initially applying the new rules in a "knee jerk" way, leading to house sales falling through.

The Royal Institution of Chartered Surveyors (Rics) has also said that the recent sharp rises in some house prices and the stricter mortgage lending rules are starting to take some of the strongest heat out of the property market.

Speculation that further steps could be taken to cool the market has also been growing. Chancellor George Osborne announced plans last week to hand the Bank of England powerful new tools which would enable it to cap the size of mortgage loans as a share of the borrower's income or the value of the house.

Mr Osborne emphasised that the market does not pose an immediate threat to financial stability now, but he also said it is important to take action to prevent any repeat of a period of boom and bust.

Meanwhile, the Bank has dropped hints that interest rates could rise sooner than expected, which would add to the costs of mortgage-holders, although any increase is expected to be gradual.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "It is still not clear how much of an impact the mortgage market review rules are having on the market and how much of the slowdown is to do with buyers questioning the prices some vendors are demanding.

"The threat of an interest rate rise is bound to be having an impact on people's inclination to take on new debt."

Mr Harris suggested that mortgage borrowers who are worried about interest rates rising might want to consider locking into a fixed-rate mortgage deal.

While there have been signs of rates on fixed deals creeping up, he said b orrowers "shouldn't panic as five-year fixes are still available for a little over 3% - historically, an excellent rate".