Analysts were today predicting no pick up in the housing market and the possibility of no interest rate cuts until August, as consumers continue to restrain their spending.

Mortgage lending was down in February, to £4.4 billion, from £4.6 billion in January and the 18-month high of £5.3 billion of December, and dropping below the average amount of the previous six months, suggesting that the delicate buds of a springtime recovery in the housing market might have suffered in the frosty winter weather last month.

“The mortgage approvals data could be an early sign that the recent firming in house prices is starting to have a dampening effect on activity,” Howard Archer, chief economist at Global Insight, warned after reviewing the British Bankers’ Association data this morning.

The figures come as it was reported by hometrack, the property website, that three-bedroom terraced houses in central London were changing hands for £1 million, reflecting the distorted nature of the housing market in the capital and south-east, where demand continues to outstrip supply.

According to the BBA report, although mortgage approvals for house purchases climbed to 57,585 in February, from 45,039 in January, this was a normal seasonal occurrence (the data are not seasonally adjusted and approvals generally tend to start climbing again in February after slowing in the mid-winter months).

Significantly, the year-on-year increase in mortgage approvals slowed to 22.3 per cent in February from 31.6 per cent in January, and was the smallest such increase since last September. At 57,585, February's mortgage approvals was below the average February level of 62,940 over the five-year period.

David Dooks, the director of statistics at the BBA, offered some context, saying: "The comparative weakness of the mortgage market in the first half of last year means that current indicators of activity - such as gross lending and approvals - are much stronger than they were 12 months earlier when the housing market was somewhat subdued.