The number of mortgages approved by lenders in July fell to 60,912, according to figures from the Bank of England. The value of mortgage lending also fell to £10.4bn, down from £11.1bn in June.

The drop continues this year’s downward trajectory in mortgage lending, taking approvals to an 18-month low.

The Bank of England also noted that the number of remortgages dropped slightly to 43,084, despite the 0.25% August rate cut from the Bank of England.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said July and August are always traditionally quieter times of the year for the market; the real test will come in September when people get back from holiday.

He added: “Remortgaging is likely to go from strength to strength. This is not so much because borrowers fear a rate rise, as it looks as though they are more likely to go the other way – rather mortgage deals are so cheap, in particular fixed rates, it is a good opportunity to snap one up. What remains to be seen is how long lenders retain their appetite to lend at such low rates.”

Richard Pike, sales and marketing director of Phoebus Software, added: “A number of potential house buyers seem to have been put off buying in July; what remains to be seen is whether this is the ‘Brexit effect’ or a normal seasonal downturn that will pick up in September. I expect there to be a further drop off in August’s figures so we will need to wait until the autumn to see if this is a pause for breath or the start of a more serious downturn.”