U.K. mortgage approvals declined in June despite measures taken by the government and central bank to ease credit conditions, data from the Bank of England showed Monday.

The number of loans approved for house purchases fell unexpectedly to 57,667 in June from 58,071 in May. It was forecast to rise to 59,500 in June.

Mortgage demand should continue to recover in response to the fall in mortgage rates, the Treasury's Help to Buy scheme and the strengthening recovery in the wider economy, said Samuel Tombs, an economist at Capital Economics.

But any recovery in housing market activity is likely to be modest and gradual, given that banks are still trying to improve their capital positions, Tombs noted.

Lending secured on dwellings increased by GBP 981 million, higher than a GBP 466 million lending seen a month ago, data showed.

At the same time, consumer credit increased at a slower pace, by GBP 489 million compared to GBP 781 million in May.

Separately, the central bank said M4 money supply grew only 0.1 percent in June from a month ago, when it remained flat. Annually, M4 recovered in June, up 1.5 percent, following a 0.1 percent drop in May.