MORTGAGE approvals in the United Kingdom remained close to the lowest level in at least 11 years last month as property values slumped, a report by the British Bankers Association showed.

Banks granted 22,448 loans for home purchases, a drop of 65 percent from a year earlier, the London-based BBA, which represents the biggest UK banks, said yesterday in a statement.

The reading is up from 22,369 in June, the lowest since records began in 1997.

The value of mortgages fell to 3.2 billion pounds (US$5.8 billion), the least since 1998, from 3.3 billion pounds.

The UK property market, which tripled in value in the decade ending last year, is going through the biggest downturn since the early 1990s as banks rein in lending. Bank of England Deputy Governor Charles Bean said last week that the credit crisis will "drag on for some considerable time."

"It would be premature to think that the housing market will now start to recover, because overall approval activity continues to be very low," David Dooks, director of statistics at the BBA, told Bloomberg News.

The pound extended declines against the dollar. The British currency traded at US$1.8337 at 10:53am in London yesterday, from US$1.8532 on Monday in New York.

Approvals for re-mortgaging fell 21 percent from a year earlier. Growth in unsecured borrowing slowed to 74 million pounds from 266 million pounds.

UK banks have curtailed lending while their write-downs and credit losses from the collapse of the US subprime mortgage market climb above US$500 billion.

The credit squeeze and the highest inflation in more than a decade brought the UK's economic growth to a standstill in the second quarter, ending the nation's longest stretch of economic expansion in a century.

Prime Minister Gordon Brown has pledged to unveil measures to revive the economy next month, while Chancellor of the Exchequer Alistair Darling suggested he's considering whether to trim taxes on house purchases.