Lending figures have revealed a fall in mortgage approvals, fuelling speculation that the housing market could be cooling down.

The weakening of loans approved for house purchase might suggest a slow down in the market

Ian Mullen, BBA chief executive

The value of loans approved by member banks of the British Bankers' Association (BBA) in June fell to �13.6bn - the lowest level for four months.

The number of loans for house purchases fell by 17%.

The Queen's Golden Jubilee bank holiday weekend may have been a factor, said the BBA, but it also added that the fall could indicate a slow down in the housing market.

A recent survey by housing market analyst Hometrack suggested that house price growth was "easing".

Economic concerns

Total lending was also down - 16% lower than the previous month, although 15% higher than in June 2001.

BBA chief executive, Ian Mullen, said: "The Golden Jubilee extended holiday appears to have had a significant effect on mortgage figures for both May and June, with May's record figures being followed by reduced activity in June."

He added: "But the weakening of loans approved for house purchase might suggest a slow down in the housing market in response to high property prices and a shortage of available properties."

In addition to fewer mortgage approvals, new borrowing on credit cards and personal loans was also lower in June.

The BBA said that if lower lending continued in these areas over the next few months, it "may indicate signs of financial strain."