The number of mortgages approved by the major banks in August increased by 81% from the same month a year ago, according to the British Bankers' Association (BBA).

There were 38,095 mortgages approved for house purchases in August by the major banks, compared with 21,001 in August last year.

"The main high street banks' mortgage lending has stabilised in a market where other lenders are largely inactive. Loans approved for house purchases have recovered to early 2008 levels, but low levels of customer demand and a limited number of properties coming on to the market will continue to moderate lending," said David Dooks, BBA statistics director.