The number of house purchase loans approved in March was down 12 per cent on the previous year, indicating weaker demand in the market, figures have shown.

The British Bankers' Association (BBA) said 75,098 homebuyer loans were agreed during the month, up on February's total in line with seasonal trends. But the figure was 10,000 lower than the same period in 2006 - a potential sign that some of the heat may be coming out of the market.

Overall, there were 198,000 mortgages approved for all purposes in March, representing £22.3 billion.

The average size of a loan approved for house purchase was recorded at £150,800, 12 per cent higher than a year earlier.

This rise negated the effect of fewer loans, with gross mortgage lending in March hitting £18.6 billion, up five per cent annually.

Underlying net lending rose by £5.1 billion during the month, similar to February's increase, but less than the recent average of £5.5 billion, the BBA said.

Figures for unsecured borrowing showed that consumers' appetite for credit continues to ebb.