Home-buyers scrambled last month to pay off mortgages whose fixed rates had matured rather than keep them and pay the standard variable rates charged by their lenders.
As a result, allowing for repayments the net value of mortgages lent by the big British banks fell by a seasonally adjusted £ 1 billion between June and July to £3.7 billion although the banks' gross lending of £16 billion dipped by only £433 million.
The banks approved 181,933, mortgages for all purposes, of which 65,611 were for house purchase. Both totals were seven per cent down from a recent peak in June. The average loan approved, for a house purchase, but not actually paid, out was £132,700.
Compared with July last year, the number of remortgages approved was nine per cent down. Approvals for house purchase were down six per cent, while their value rose by nine per cent.
The biggest change was in the pattern of "equity withdrawal" loans taken by home owners raising cash on their property to use for other purposes. The number of these was 25 per cent down on last July, while their average value was 17 per cent lower, reflecting this year's house prices.