Gross mortgage lending in July was an estimated £12.6 billion, according to new data from the Council of Mortgage Lenders (CML).
The total is marginally lower (1%) than June's gross lending figure of £12.68 billion and a 6% fall from £13.3 billion in July 2010.
Recent figures from the Royal Institution of Chartered Surveyors indicated that demand for property in the UK is flat and that people are holding off putting their homes on the market.
In addition, the number of sales being reported by HM Revenue and Customs appears to have held steady, although underlying trends show that numbers are drifting downwards.
In fact, sales figures of 204,000 in the second quarter of 2011 were the weakest in two years.
"Housing market conditions remain subdued, but pretty stable. Seasonal factors continue to provide some support, but underlying house purchase activity may drift lower over the coming months," said Bob Pannell, chief economist at the CML.
"Cash-based property transactions appear to have dipped in June, both in absolute terms and as a share of overall market activity.
"It is unclear at this stage whether this reflects statistical noise, the gradual recovery in mortgage availability or investor nervousness about UK residential property.
"Early indications are that house purchase lending in July was buoyed by seasonal factors, but the underlying picture looks stable at best and it is possible that we may see overall house purchase activity drift lower over the coming months."
There was better news in the buy-to-let market, where gross lending was up by a fifth in Q2 to £3.5 billion – although most of this increase reflected higher remortgage activity.
While lending to support house purchase by landlords was its strongest for three years, levels remain very subdued compared with a few years ago and buying by landlords accounts for only about 12% of activity.
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