Sterling fell more than half a percent against the dollar on Monday as more evidence emerged that higher interest rates are cooling Britain's once-booming property market.
Data from the British Bankers' Association showed mortgage lending rose at its weakest monthly pace in two years in August, while separate figures showed a fall in loan approvals for house purchases.
The figures reinforced expectations UK interest rates may be nearing a peak and pushed sterling to session lows against the euro and the dollar.
"The spotlight is on the housing market and the current thinking is the Bank of England will keep rates on hold again next month," said Mark Henry, currency strategist at GNI.
"Some people are even questioning whether we have seen the peak for the current cycle.
At 1400 GMT, sterling was nursing losses of over half a percent at $1.7820, just over a cent away from three-month lows hit earlier this month.
The pound was also soft against the euro at 68.08 pence, moving back within sight of seven-month lows set last week.
The Bank of England has raised interest rates five times since November, lifting benchmark borrowing costs to 4.75 percent.
Signs British consumers are feeling the pinch from recent rate rises have weighed heavily on the pound over the past two months, prompting the currency to stage a sharp about-turn after a strong performance in the first half of the year.