LONDON, Oct. 23 -- The British Bankers' Association (BBA) reported that mortgage approvals dropped in September, leading to the first annual decline in loans for 18 months.

The main high street banks reduced the number of mortgages approved for house purchase for the third consecutive month in September.

At 39,271, approvals were down by over 2,000 compared to August, and are just under 10 percent lower than the same period a year ago -- the first annual decrease since early 2013.

The value of approvals for house purchase dropped 5.6 percent year on year.

"A year ago there were many of us who were concerned by the heady pace of property price rises. Today's figures suggest we are now experiencing a steadier housing market and that's no bad thing," said Richard Woolhouse, the BBA's chief economist.

The continued weakness in mortgage lending is in line with other measures reporting a slump in housing demand, said Matthew Pointon, Property Economist of Capital Economics.

But he expected the mortgage lending will begin to pick up by the end of the year, as lenders are planning to boost the availability of secured finance over the remainder of the year.