Mortgage approvals rose by just three percent in August from a year ago to 71,278, British Bankers' Association data shows, after a modest five percent annual increase in July.
Earlier in the month the BBA reported a record rise in underlying mortgage lending in August of 6.2 billion pounds, indicating that a shock hike in interest rates last month to 4.75 percent had done little to dampen demand for housing.
Many economists predict a further rate hike later this year, given a strong housing market, robust economic growth and above target inflation.
Compared to the numbers of secured loans approved at the same time in previous years, August shows robust and stable demand orientated towards house purchase rather than for other purposes, though below the volumes seen in 2003, said BBA director of statistics David Dooks.
On Friday, the Bank of England will release seasonally adjusted mortgage approvals data, which include mortgages approved by other lenders. Analysts expect approvals to come in at 120,000 in August, the same as in July.