Mortgage approvals dipped to their lowest level since June last year, amid signs that new affordability checks are having an impact on the market.
The Bank of England said that, in May, there were 61,707 home loan approvals for house purchases.
This was down from 62,806 the previous month, and lower than a recent peak of 75,901 in January.
Further evidence of a two-pace housing market has been revealed as data shows prices rocketing in London but rising below inflation in some other regions.
Property prices were up by 18.5% year-on-year in London in May, but only rose by 0.9% in the North East of England and 1.3% in the North West.
Bank of England governor Mark Carney has said that he looked at people's ability to service their debts before deciding on the new restrictions for mortgage lending.
Speaking to Robert Peston, the BBC's Economics editor, Mr Carney said that once borrowing goes above 4.5 times income it "becomes more difficult to service" and that they are trying to stop a "mass of people moving into riskier mortgages."
Plans by the Bank of England to cap riskier mortgage lending have been hailed as an important "insurance policy" for the UK economy.
Under the proposal, lenders will not be allowed to lend any more than 15% of residential mortgages at more than 4.5 times a borrower's income.
The move will have little initial short-term impact on people's chances of getting a home loan.
The right of council and social housing tenants to buy their homes at a discounted rate is to be abolished in Scotland after MSPs backed scrapping the measure.
The Conservatives made a last-ditch attempt to block the move at Holyrood.
But MSPs voted by 103 votes to 12 against the Tory amendment to the Housing (Scotland) Bill.
Britain is running out of land for food and faces a potential shortfall of two million hectares by 2030 according to new research.
The report, from the University of Cambridge, says the growing population plus the use of land for energy crops are contributing to the gap.
It criticises the government's lack of a coherent vision on how to make the most of UK farm land.
Sales of new US homes surged to a six-year high in May suggesting the housing market is beginning to recover from its recent slowdown.
Sales increased by 18.6% to a seasonally adjusted annual sales rate of 504,000 - the highest level since May 2008, according to the Commerce Department.
However, the S&P/Case-Shiller index, also released on Tuesday, found house price increases slowed in April.
Home sales hit their highest level of the year in May but a banking group says the "heat is coming out of the housing market".
Some 100,360 homes were sold in the UK during the month, up from 95,600 in April, data from HM Revenue and Customs (HMRC) shows.
Sales tend to pick up at this time of year, known as the spring bounce.
But the British Bankers' Association said mortgage approvals - an indicator of future sales - had dropped.
Abu Dhabi United Group, which owns Manchester City football club, will invest in a plan by Manchester City Council to build new homes.
The council plans to build at least 830 new homes in the Ancoats area of the city and neighbouring New Islington.
The plan will need to raise £1bn in the next 10 years and may need further investors to build the homes.
Lenders expect demand for mortgages to continue to rise in the next three months but supply may be squeezed slightly, the Bank of England has said.
The Bank's Credit Conditions Survey also found that demand for home loans "increased significantly" in the second quarter of the year.
The survey comes a few days before the Bank announces whether it will take any action to dampen the housing market.
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