More positively the analyst noted that overall intermediated mortgage sales (£14.8bn) were up more than 10% compared to the same month last year and that a dip in July was not uncommon.
However, it also warned that the long-term outlook for the market was very unclear.
Resi collapse
Residential mortgage sales were hardest hit, falling 12.8% (£1.8bn) to total £12.2bn. However, the buy-to-let market was largely unchanged at £2.6bn worth of mortgage completions.
All regions across the UK suffered a significant fall in sales, although Scotland (down 19.8%) and Northern Ireland (down 18.5%) and the South East (down 15.4%) were hardest hit.
The North West (down 5.7%) was hit least.
Data from Equifax Touchstone showed that the average value of a residential mortgage in July was £199,286 (2016: £188,115) with typical buy-to-let mortgages coming in at £159,721 (2016: £158,415).
Worrying gap
Equifax Touchstone director John Driscoll said: “Sales have tumbled in July, with every region suffering substantial declines as buyers are put off by continuing political and economic uncertainty, coupled with the worrying gap between inflation and wage growth.
“These circumstances may be further compounded by the potential for an interest rate hike as early as September, driven by continued pressure on the pound,” he added.
