Pressure on the government to shore up the sagging mortgage market rose yesterday after the Bank of England revealed lending for new home purchases in July was the lowest since records began in 1993.

Loan approvals for house purchases fell to 33,000 in July, down from 35,000 the previous month and well below the average of 55,000 in each of the previous six months.

Mortgage approvals are now 71.1% down from their July 2007 level.

The fresh low in lending for home purchases, which is below even that in the depths of the last property recession of 1992, reflects general economic trends but also the credit crunch, which is making lenders far more cautious, according to David Page, economist at Investec Securities.

'This means that house prices will continue to fall,' Mr Page said. 'We are not confident that we have reached a bottom yet.'

Financial Times, The Times, Daily Telegraph, The Independent