According to the CML, the number of new mortgages granted for house purchases in August experienced a 29% annual drop.

According to the latest figures from the Council of Mortgage Lenders (CML), the number of new mortgages approved in the UK in August fell 5% from July.

In August, 53,000 new mortgages were approved compared with the 56,000 approvals in July. The August total is however 29% higher than the same month last year.

There were 19,200 loans to first-time buyers and 33,400 loans people moving house.

In August, house purchase activity was worth £7.2 billion and accounted for the largest share of total mortgage activity since 2002.

Paul Samter, CML economist, said: “House purchase activity has revived from its moribund state at the beginning of the year.

“It will be a drawn out recovery process with seasonal ups and downs, but house purchase activity is now on firmer footing.”

The level of remortgaging in the UK remains low and activity fell in August. The CML attributes the continued decreases to the extremely low interest rate environment and restrictive lending criteria for the most attractive deals.

There were a total of 32,000 remortgage loans in August, 22% less than July and a 57% drop on the same month last year.

The CML are banks, building societies and other lenders who together undertake around 98% of all residential mortgage lending in the UK. There are 11.1 million mortgages in the UK, with loans worth over £1.2 trillion.