The number of mortgage approvals, especially those for house purchases, was lower last month, according to the British Banking Association (BBA).

Recent statistics from the trade association also suggest that mortgage lending rose at a slower rate in October.

BBA statistics director David Dooks said that current levels of demand and supply have been shaken by the credit crunch, interest rate rises over the past 12 months and pressure on household finances, among other factors.

"October's data provide evidence of a rapidly slowing mortgage market and of consumers limiting their personal borrowing," he explained.

Mr Dooks concluded that due to recent difficulties in financial markets, personal deposits remain lower as consumers consider where to keep their money.

Commenting on the statistics, Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, said that first-time buyers are being especially badly effected by mortgage lenders "reigning in" their lending.