Building society gross advances amounted to £3,970 million in July 2005, compared to £5,125 million in July 2004.
Net advances were £1,295 million in July 2005, down from £2,218 million in July 2004.
Approvals (loans agreed, but not yet made) decreased to £4,385 million in July 2005, from £4,760 million in July 2004.
In the savings market, building societies had net inflows of £970 million in July 2005, down from £1,097 million in July 2004.
Building society net receipts into cash ISAs were £127 million in July 2005.
Commenting on the mortgage market, Adrian Coles, director-general of The Building Societies Association, said: "As predicted mortgage lending has continued at a steady pace. Although the figures are down from the heights of 2004, the market looks like it has adjusted to a more sensible level. It is too early to tell what impact the recent Bank of England base rate cut will have, but approvals - loans agreed but not yet made - indicate that this pace will continue."
On the savings side, Coles said:
"Strong inflows into building society cash accounts continue. There has been a four fold increase in savings on a seasonally adjusted basis since July 2003, when net inflows were £255 million, compared to £1,005 million today. It seems consumers are still wary about investing in stocks and shares and are opting to put their money into building society cash accounts instead."
