Decline in mortage approvals smaller than expected

The pattern continued for remortgaging, with 64,000 approvals in August against 69,000 in July, and other loans which showed 39,000 August approvals down from 42,000 in July.

The increase in net consumer debt in August of £1.2 bn was above that in July but below the previous six month average.

The increase in net lending secured on dwellings of £0.1 bn was below the increase in July and the previous six month average.

Net other loans and advances increased by £0.6 billion, below the July increase. The annual growth rate of consumer credit slowed by 0.1 percentage points to 6.8% and the three-month annualised growth rate also slowed by 0.1 percentage points, to 6.1%.

Commenting on today's Bank of England mortgage lending statistics, Council of Mortgage Lenders director general Michael Coogan said: "Gross mortgage lending, but more particularly net mortgage lending, fell sharply in August, according to the Bank of England. It is quite possible that we could see an overall shrinkage in the size of the mortgage market in the short term.

"The general downturn in lending will not have been helped by the speculation earlier in the year about stamp duty, which may have affected these figures.

"Against this backdrop, lenders deserve recognition for attempting to maintain a flow of mortgages into the market despite pricing volatility, scarcity of funding, and falling house prices.

"We welcome the Government's attempts to foster greater certainty in the current uncertain market, and we await with interest news of the Crosby recommendations on what measures may be planned to improve the mortgage funding market."