The first figures on mortgage lending to cover the full month since the Brexit vote show that lending to home owners fell 13 per cent month-on-month in July, and 12 per cent year-on-year.
According to the Council of Mortgage Lenders (CML), the amount of borrowing from first-time buyers has also declined month-on-month and the buy to let market has been muted.
First-time buyers borrowed £4.4bn in July, a decrease of 19 per cent as compared to June and a drop of four per cent compared to the same month last year.
This amounted to 28,200 loans - a 17 per cent fall month-on-month and a six per cent drop year-on-year.
Home-movers were also less active, with the total amount borrowed falling nine per cent month-on-month to £6.2bn - a 16 per cent drop compared to a year ago. The total number of loans was 29,900, an 11 per cent drop month-on-month and a 19 per cent drop on July last year.
There was a month-on-month increase in the borrowing by landlords, up three per cent on June at £3bn. But this represented a 21 per cent annual fall in the total amount borrowed by landlords and the number of loans was down 26 per cent on last year, at 18,600.
Paul Smee, director general of the CML, commented: “It is hard to determine whether these figures reflect a first uncertain reaction to the referendum vote, or are a sign of a market which was already cooling.
"It will be quite some time before a full assessment can be made. We do believe that the Buy-to-let lending market is still readjusting after the large level of activity before the changes to stamp duty on second properties in April.
“Remortgage lending on the other hand has continued to grow, and reacted with a 7-year monthly high. Borrowers seem keen to take advantage of the wide range of competitive deals in the market and, following the base rate cut in August, this is likely to continue.”