Fresh demand for mortgages for house purchase in the UK remained subdued in February, the British Bankers� Association said yesterday, adding to a raft of evidence pointing to a weaker housing market.

Fresh demand for mortgages for house purchase in the UK remained subdued in February, the British Bankers' Association said yesterday, adding to a raft of evidence pointing to a weaker housing market.

The BBA said the number of fresh loans approved by the major UK banks for house purchase edged up from 43,732 in January to 43,870 last month. However, this was only marginally higher than the 42,189 figure for December, which was the weakest since comparable records began with the formation in September 1997 of the "Major British Banking Groups" constituency following conversion of the larger building societies.

Seema Shah, property economist at consultancy Capital Economics, said: "In view of the credit squeeze, the accompanying tightening in mortgage lending standards, as well as fears of further house price falls, the subdued level of mortgage demand in February should be no surprise. With no improvement in these factors on the horizon, housing market activity is unlikely to pick up any time soon. Mortgage approvals for new house purchase (were) barely changed from January, but 33% less than a year ago. Since the credit market turmoil began in September, mortgage approvals have languished at sub-50,000 levels, and are lower than they were during the 2004-05 housing market downturn, or indeed any time in the last decade."

Shah said Capital was "not optimistic" about the outlook for mortgage demand, "with potential buyers either unable to raise enough of a deposit to get on the housing ladder or just simply unwilling to commit themselves to a falling market".

Noting the housing market would also have to "deal with" a weakening economy and labour market, Shah added: "Overall, there is little to suggest that house prices are going anywhere but down."

The BBA said mortgage lending rose by a net £5.6bn in February, an acceleration from the £5.0bn increase in January.

But it attributed this to an increase in the major banks' market share amid recent strong remortgaging activity.

Surveys have indicated that the housing market is so far proving more resilient in Scotland than in other parts of the UK.