LONDON (SHARECAST) - The number mortgages approved in the UK rose to a four-month high in August, but was still well down on the year before.
Lenders approved 30,533 mortgages in August, up from 28,750 in July, according to the British Bankers' Association.
The consensus estimate had been for an increase of 28,100.
However, the total was still down 13% year-on-year from August 2011 and mortgage approvals remained very low compared to past norms.
The latest mortgage approval figure was only 55.1% of the average monthly level of 55,408 seen since 1997.
There there was a net mortgage repayment of £284m in August, following net borrowing of £96m in July.
Dr Howard Archer, Chief UK Economist at IHS, said the this net mortgage repayment in August reflected both muted housing market activity and high capital repayments.
"This supports the view that house owners are looking to take advantage of low mortgage interest rates to reduce their outstanding mortgage levels to improve their balance sheets," he said.
"The BBA mortgage data do little to change the view that housing market activity remains in the doldrums and we see no reason to change our view that house prices are likely to trend modestly lower over the latter months of 2012 and very possibly beyond," he added.