The number of new mortgages approved by lenders, but not yet lent in September, has risen to its highest level since June 2004, according to fresh figures from the Figures from the Bank of England (BOE).

BOEs figures reveal that lenders approved 107,000 new mortgage loans in September, suggesting that the housing market may continue to recover following Augusts cut in interest rates.

The long-term mortgage approvals average over the past decade is 99,000 per month, according to the Bank of England.

Commenting on the figures, CML Director General Michael Coogan said: "Our latest data provides evidence that the housing market is in relatively good health, and households are not lacking confidence to take on mortgages.

"While expectations of lower interest rates have undoubtedly helped to trigger the recent resurgence in lending, we believe the Bank of Englands Monetary Policy Committee will put off cutting rates further until it is clear that inflationary pressures are easing. We would correspondingly expect lending activity to level off over the coming months."