The number of mortgages approved by British banks in September dropped to its lowest levels since May, according to findings by the British Bankers ‘ Association (BBA).

The dearth of homes on the market has been blamed for the drop, with the BBA saying that mortgage approvals for house purchases plunged to a four-month low of 44,489 in September. Despite this, they remained 14% up on the same month a year ago.

Meanwhile, gross mortgage borrowing in August was £12.1bn, 17% higher than a year ago. The BBA’s report also found that net credit card lending and lending for personal loans and overdrafts both fell from August to September.

According to Howard Archer, chief UK and European economist at IHS Global Insight, the decline in mortgage approvals in September suggests that increases in interest rates in the near future seem unlikely.

“It may be that mortgage approvals had been lifted in recent months by a significant number of house buyers looking to move quickly to try and lock in a low mortgage interest rate before they start rising,” he said. “It is also possible that lower mortgage approvals in September is a sign that housing market activity is being constrained by a shortage of properties on the market.”

Archer also said that low interest rates have helped consumers, while high consumer confidence has meant that people have been more willing to borrow in recent months.

With the supply of new housing remaining scant, house prices in Britain have started to grow more strongly recently, after slowing down towards the end of last year.

Richard Woolhouse, the BBA’s chief economist, said: “Borrowing figures in the mortgage market remain strong as customers take advantage of record low interest rates. In particular, remortgaging remains high as savvy customers secure attractive deals ahead of a possible rate rise.”