The number of mortgages approved continued to fall in August, according to the British Banker'' Association (BBA).

Some 61,051 applications from people wanting a home loan were successful, down 14 per cent from August 2006.

The total number of mortgages issued, taking into account an increased number of people re-mortgaging their property, totalled 168,291.

David Dooks, BBA director of statistics, said: "With house price inflation still in double digits, we might have expected stronger gross lending in August."

"Other than the current spate of re-mortgaging, lower approval numbers also endorse our view that customer demand was starting to moderate even before the September difficulties in the financial markets."

The findings from the BBA appears to echo those of several other groups, which predict both the housing and mortgage markets are set to slow down.

Last month, the Council of Mortgage Lenders said that the total amount of money leant by banks, building societies and specialist lenders to homebuyers fell to £32.2 billion in August from £34.1 billion in July.