The amount of loans approved for mortgages on housing property has dropped to its lowest point since records began it has been announced.

The British Bankers Association have released figures showing a 25 per cent drop within a year for approved loans for mortgages. The figures emphasis the current perilous state of the housing market with no end in sight.

"The monthly numbers of approvals for house purchase, which have fallen by some two-thirds over the last year, levelled off in July," said David Dooks, the BBA's statistics director. "It would, however, be premature to think that the housing market will now start to recover, because overall approval activity continues to be very low. The pressures on household budgets are reflected in the relatively weak rise in individuals' deposits and, with consumer borrowing growing only slowly it seems that consumers are acting prudently."

Allan Monks, of the economic and policy research team at JP Morgan concluded "This still leaves approvals at a record low, down around 70 per cent from the peak in late 2006..."We continue to anticipate a modest recovery in house purchase activity [in the second half]. But the still very low level of approvals points to falling house prices – we currently expect an 18 per cent drop by year end, and a further 9 per cent decline by the end of 2009."