Figures from Council of Mortgage Lenders show a decline on lending in July but underlying lending has 'stabilised'

Mortgages fell 13% in August compared to the previous month, according to the latest figures from the Council of Mortgage Lenders.

The body said total mortgage lending in the UK amounted to about £12.5bn, down from July’s total of £14.5bn.

However, the CML said a seasonal fall in lending activity in August was to be expected and underlying lending seemed to have “stabilised” over the summer.

The body’s economist, Paul Samter, said: "The likelihood of a significant pick-up in lending remains weak, but the prospects for wholesale funding markets are improving.

“This could result in a gradual easing in constraints on the supply of funding over time.

"However, demand from consumers and a prudent approach to lending criteria are likely to mean that the market remains subdued.”

Meanwhile, the Bank of England has reported that lenders are now approving about 80% of mortgage applications, up from 70% at the beginning of the year.