British mortgage approvals for home purchases fell in July at their slowest annual rate in a year, in a sign that Britain's housing market may be stabilising, industry data showed on Thursday.
The British Bankers' Association said the number of mortgage approvals - loans agreed but not yet made - fell by 6 percent from a year ago to 65,611 in July, compared with an annual decline of 20.4 percent in June.
That was the slowest rate of decline since approvals started falling on an annual basis a year ago, when Britain's housing market began its sharp slowdown from double-digit rates of price gains to around three percent now.
Analysts said the data, which are not adjusted for seasonal effects, indicated figures from the Bank of England on August 30 would show mortgage approvals remained stable in July, auguring well for house prices.
The housing market is a key influence on consumer spending in Britain, where two thirds of households own their own home.
"Today's mortgage approvals data lends support to the view that house price inflation is very close to troughing," said Nick Verdi, an economist at Barclay's Capital.
"Moreover, the latest data suggests that a reasonably strong bounceback in the rate of house price inflation looks to be on the cards over the next few months," he said.
But other analysts said it was perhaps still to early to say the housing market had definitely troughed.
"The question now is if July marks a new weak trend or whether it was just a blip - it's too early to draw any conclusions with regard to the latest figures," said Philip Shaw, an economist at Investec.
July approvals were 7.3 percent lower than the 12-month high of 70,750 they hit in June while the average value of loans approved was up 9 percent from a year ago at 132,700 pounds in July.
The BBA said this could mean there were more transactions between existing homeowners trading up to bigger properties, rather than an influx of first-time buyers to the market.
New buyers are vital to the health of the housing market as they buy cheaper properties at the bottom of the housing chain and thus ensure movement in the market, but past interest rate hikes have deterred many from buying their first home.
Confirming a preliminary figure from last week, the BBA said that underlying seasonally adjusted mortgage lending rose by 3.7 billion pounds - the weakest rise since December 2001 - compared with 4.7 billion pounds in June.
"The weakness resulted largely from higher than usual levels of redemptions, particularly relating to maturing fixed-rate loans," said BBA director of statistics David Dooks.
The BBA said unsecured credit card lending rose by 123 million pounds in July - less than half June's 293 million pound increase - reflecting weaker retail sales that month.
Weak consumer spending has been a drag on the economy and prompted the Bank of England to cut interest rates for the first time in two years in August to 4.5 percent from 4.75 percent to boost consumption.