Mortgage repayments have outstripped new lending in August for the first time as speculation of a stamp duty cut froze the housing market.

The Bank of England's latest data showed "negative" net lending of £700 million - the first such instance since its records began in 1993 - as buyers sat on their hands ahead of the Government's September move.

The Treasury eventually announced it would lift the stamp duty thresholds from £125,000 to £175,000 in a bid to revive the housing market.

Mortgage approvals crept higher from 32,000 to 33,000 in September, but show little sign of recovery from the record lows of August, the figures showed.

Banks lent a net £2.2 billion in September, but this remains well below the £3.5 billion average of the past six months.

Experts said the figures reinforced pressure on the Bank of England to slash rates by at least another 0.5 per cent at its next meeting.

Howard Archer, chief UK and European economist at Global Insight, said the data suggested the downturn in the housing market "still has a long way to run".

"To put the figures into perspective, total mortgage approvals of 98,000 in the third quarter of 2008 failed to match the total of 101,000 in September alone in 2007," he said.

Vicky Redwood, economist with Capital Economics, added that the figures were consistent with house price falls of up to 25 per cent, compared with the 13 per cent seen so far.

"With credit still restricted, potential buyers will find it hard to get a mortgage. Meanwhile, lenders have not passed on October's rate cut in full to new mortgage rates," she said.

The number of remortgages grew to 72,000 from August's low, but the number of loans secured on homes for other purposes shrank by 2,000 to 37,000.

This marks a further fall-off in the trend of borrowers increasing the size of their mortgages with the same lender - used for home improvement or a new car for example - as property prices fall.

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