Levels of net mortgage lending were at their lowest levels for more than two years in July, despite an increase in household borrowing on the previous month.
According to the Bank of England’s money and credit report for July 2018, households borrowed an extra £3.2bn against their homes compared with the previous month’s figure - but monthly net lending still dropped to its lowest level since April 2017.
Despite the drop, the annual growth rate for mortgage lending remained at unchanged at 3.2 per cent in July and roughly where it has sat since 2016.
Mortgage approvals fell slightly to 65,000 in July, remaining close to their average over the past six months, but remortgage approvals dropped 5.5 per cent to their lowest levels since May 2017 - although remortgage figures still remained above levels seen in recent years.
John Eastgate, sales and marketing director at OneSavings Bank, said: "Buyer activity remains pretty depressed as the market comes to terms with economic uncertainty on top of existing obstacles of a lack of supply and increasing affordability challenges.
"Buying a home is the most significant financial outlay the majority of people will make, so with heightened fears that a turbulent Brexit and a slower economy might impact job security and property prices, consumers are naturally putting the brakes on homebuying decisions."
Danny Belton, head of lender relationships at Legal & General Mortgage Club said the year-on-year mortgage activity within the sector remained largely unchanged with a number of consumers looking to step onto the property ladder keeping the market buoyant.
He added: "However, it will be interesting to see if next month’s figures will be affected with the base rate rise.
"Although the effect is unlikely to be substantial, for anyone concerned, we would encourage borrowers to get in touch with a mortgage broker - brokers are perfectly placed to provide tailored advice to customers, no matter what challenges the housing climate might present."