The latest indicators end a week of surveys, which point to the housing market recovery losing steam.

Bank of England figures for June showed lenders granted 47,643 loans to buy homes, falling from 49,461 in May. The peak last November reached 59,000.

Net mortgage lending growth eased to £665m in June well below forecasts for a rise to £1bn from May's figure of around £840m.

The bank's governor Mervyn King pointed to continued weak credit flows as a major risk to economic recovery and warned the upturn was not assured, despite stronger-than-expected growth in the second quarter.

King said that improvement in credit conditions seen earlier this year had come to a halt, and that the squeeze on lending was making life very difficult for smaller firms and posed a significant challenge to policymakers.

Its latest monthly survey showed that prices slipped 0.5% in July, taking the annual rate to 6.6% compared to 8.7% in the 12 months to June.

The Nationwide said prices were easing because more homes were being put up for sale but demand from buyers remained subdued.

A significant fall in prices could severly impact on house building activity as builders seek to shore up profits rather than push volumes.

Martin Gahbauer, Nationwide's chief economist, said: "So far in 2010 demand from home buyers has made little progress in building upon the recovery seen during much of 2009.

"Despite the introduction of a second stamp duty holiday for the vast majority of first time buyers and record low interest rates, the number of properties changing hands across the UK is still running at only half the levels seen prior to the financial crisis and recession."

He added: "At the moment, the market is clearly easing relative to the very tight supply conditions that characterised it since early 2009.

"However, it will take several more months to establish whether house prices are now simply oscillating around a flat price trend or whether a period of downward trending prices may be in store."

Earlier this week a Hometrack survey revealed house prices had fallen by 0.1% in July - the first decline in 15 months, according to its data.

The report warned that talk of impending public spending cuts is damaging confidence, with a 1.3% fall in new buyers registering with agents and homes now taking 8.7 weeks to sell, which is a return to the period seen last August.

Housing minister Grant Shapps said he will look at ways builders could make payments into a community fund to pay for energy projects, like wind farms and district heating schemes.

This would give councils and developers more freedom and flexibility over how they meet their zero carbon obligations.

Under the definition of zero carbon developers are allowed to offset 30% of a new development’s carbon emissions offsite, the so called “allowable solutions”.

Minimum standards for energy efficiency measures such as cavity wall insulation will also be set through future revisions to building regulations.

These will be based on those revisions outlined in a recent consultation on the Code for Sustainable Homes, which set key benchmarks for the sustainability of new homes.

Mr Shapps also confirmed the allocation of £600,000 to the Zero Carbon Hub to continue its work this year.

The Hub has also been tasked with testing new benchmarks for carbon emission reductions.

Shapps said: "This is about meeting tough environmental standards, but not dictating how every home should be built.

“Councils and developers together are in the best position to decide how best to meet these standards, so we are looking at giving them the flexibility and a range of options to do this.

He added: "We are committed to all new homes being zero-carbon from 2016, and have the right mix of measures in place.

"First and foremost a zero carbon home must use as little energy as possible, which is why I will shortly announce a minimum standard for key energy efficiency measures like loft and cavity wall insulation.

"And to ensure the benchmark for carbon emission reductions is both ambitious and achievable, I look forward to seeing the results of tests the Zero Carbon Hub will conduct over the next few months."

Latest figures from the Office of National Statistics show construction output rebounded in the period April to June 2010, helping boost UK GDP growth to higher than expected levels.

Construction's unexpected output spike helped accelerate the overall UK economy into a 1.1% rise in the second quarter, almost twice the rate analysts had expected.

In fact, construction's ability to drive growth was underlined by a 0.4% contribution to overall GDP, equal with the financial services sector as the biggest contributors.

In the first quarter of 2010 construction output fell 1.6%.

Construction economist Brian Green said the surge could be explained by the harshness of the winter in the previous months.

But he said spending cuts were likely to start to take their toll on future output figures.

Green said: "This looks like an unexpected last hurrah for construction before spending cuts bite."

Ian McCafferty, CBI chief economic adviser, said: "The second quarter will have been boosted by a sharp turn in the inventory cycle as firms have taken action to rebuild stocks, as well as strong growth in government expenditure.

"These two factors are likely to fade in the second half of the year, and we expect that growth will be more modest into 2011."

Analysts also urged caution in interpreting the figures, which were based for the first time on a new monthly survey cycle.