Within the total, net lending secured on dwellings showed a net repayment of £0.4 billion, weaker than the June increase of £0.1 billion and below the previous six-month average.
The numbers of loan approvals for house purchase of 50,123, and for remortgaging of 35,206, were both higher than in June and above the previous six-month average. This means that the recent recovery in the housing market looks set to continue.
Simon Rubinsohn, RICS chief economist said: "The further rise in the number of mortgage approvals during July is testament to the continuing recovery in the housing market. However, the sharp fall in net lending during the month demonstrates that lenders still remain a little hesitant to increase the total pot of money committed to the mortgage market. Significantly, the mortgage repayments increased to their highest level (in July) since March implying that existing funds are being recycled rather than new monies being added to the mortgage market. RICS expects mortgages for new home purchase to continue to edge upwards over the coming months, ending the year between 55,000 and 60,000 but this level of activity still remains low from a historical perspective. The fundamental issue remains the withdrawal of many lenders from the mortgage market over the past year and the reluctance of new participants to play a meaningful role in delivering finance to potential homebuyers."
Within total secured lending, secured lending by banks (excluding the effects of securitisations) increased by £2.1 billion, above the £1.9 billion increase in June.
The number of loans approved for other purposes at 27,278 was lower than in June and below the previous six-month average.
