This is a 36% decline from the £24.9bn recorded in July last year.
The trade body said lending figures remain at historic lows as the £16bn of gross lending in July was the lowest July figure since 2001. It was also £11bn lower than the July average over the previous seven years.
The CML said the figures point to a modest improvement over the summer following “an exceptionally weak winter.”
The trade body added that house purchase activity, rather than remortgages, was likely to have driven the growth in advances as borrowers tended to stick to low standard variable rates (SVRs) rather than remortgage.
Paul Samter, economist at the CML, said the July gross lending of £16bn was the highest level in nine months and consistent with the rise in house purchase approvals. However, he warned the bounce-back in activity coincided with a seasonal bounce.
He added: “We expect improved sentiment to support the market, but a further significant pick-up is unlikely with so many obstacles in place. As a result, we anticipate some seasonal slowing in lending volumes and housing transactions over the latter part of the year and the picture of a slow but more stable market to emerge.”
Nicholas Leeming, director of Propertyfinder, said there was an increasing confidence in the market and people wanted to move due to attractive house prices.
He added: “However, the fact the CML has maintained its full year lending target shows lenders are still no closer to actually unlocking the vast sums of government and Bank of England cash they are awash with. Lenders fear future price falls, but perversely it is their own unwillingness to provide finance which could undermine the recovery in the housing market and the wider economy.”
