Mortgage approvals last month fell by more than half from a year earlier, according to data from the British Bankers’ Association which economists said underlined the extreme pressure on the housing market.

A total of 21,584 new mortgages for house purchases were approved in October, down from 23,383 in September and 44,939 mortgages in October 2007.

Howard Archer of IHS Global Insight described the data as extremely weak, maintaining the dire news on the housing market'.

Capital Economics, a consultancy, said: 'The dip in mortgage approvals in October supports our view that rising unemployment and tighter lending criteria will offset any stimulus from lower interest rates. Housing market activity is set to remain subdued for the foreseeable future.'

David Dooks, statistics director at the BBA, said the figures reflected a much reduced appetite for borrowing.

Financial Times, The Times