By Andy Bruce and Costas Pitas
LONDON (Reuters) - British mortgage approvals slipped a three-month low in August, according to official data, falling slightly more than expected and adding to signs the housing market has cooled in recent months.
The Bank of England said mortgage approvals numbered 64,212 last month, the weakest reading since May and down from 66,100 in July. Analysts had forecast a fall to 65,000.
Economists said the decline was a consequence of tougher checks on mortgage borrowing introduced in April.
"With approvals having nudged down for two successive months and other evidence ... pointing to weaker demand, the housing market resurgence seems to be running out of legs," said Martin Beck, senior economic adviser to accountants Ernst & Young.
Surveys from the Royal Institution of Chartered Surveyors and mortgage lender Halifax earlier this month showed house price growth slowed significantly in August.
But despite recent signs of moderation, the housing market remains a major concern for policymakers looking for threats to Britain's financial stability.
The BoE's Financial Policy Committee releases its quarterly policy statement on Thursday. In June it introduced tougher checks on mortgage lending and capped home loans to 4.5 times a borrower's income.
"One thing to look out for here is any assessment from the committee on the government's Help To Buy scheme," said Investec economist Philip Shaw, referring to a programme that guarantees higher loan-to-value mortgages.
Earlier this year, the European Commission said the government should consider scaling back Help to Buy because of rising house prices, and the BoE is scheduled to report back to the government on whether the scheme should continue.
The housing market is a major political battleground ahead of a national election next May.
Britain's prime minister David Cameron pledged on Saturday to build 100,000 new homes and offer them to younger first-time buyers at a 20 percent discount if his party wins.
A LONG WAY OFF PEAK
Monthly mortgage approvals are still well short of the 90,000 level seen before the 2008 financial crisis, and below a recent peak of more than 76,000 in January.
The British Bankers' Association reported last week that the number of mortgages approved by its members fell to a 12-month low in August.
Earlier this year, Governor Mark Carney said that housing was the biggest domestic threat to Britain's economic recovery, because of the risk of borrowers taking on too much debt.
The BoE has been seeking to cool the mortgage market since January when it refocused its Funding for Lending Scheme away from mortgage lending and dedicated it exclusively to business lending.
The BoE said lending to non-financial businesses increased by 817 million pounds in August, down from a 1.166 billion pound rise in July. Year-on-year, lending fell by 2.8 percent, the smallest decline since the series started in April 2012.
Lending to small businesses alone contracted by 301 million pounds, although the pace of decline eased from July's 434 million pound drop.
Unsecured lending to consumers rose by 898 million pounds in August, slightly above a Reuters poll forecast for 850 million pounds. On an annual basis, consumer credit rose by 6.1 percent - its fastest rate of growth in eight years - from 6.0 percent in July.
"This is consistent with high levels of confidence and strong growth in retail sales despite sluggish wage developments," said Barclays economist Fabrice Montagne.
"In the months ahead, we expect a continuation of these trends, with mortgage activity consolidating while consumer lending expands further."
(Editing by Hugh Lawson)