It was the highest value of lending completed since March 2016, which hit £26.4bn, when demand peaked from landlords to beat the introduction of the 3% second home stamp duty surcharge.
Excluding that month, July saw the highest lending value completed since the credit crunch.
However, the number of mortgage approvals slipped on the last two months and compared to July 2017, with 43,967 purchases approved.
Remortgage approvals were also down on recent months at 28,295, but this figure was slightly up on the same month last year.
UK Finance director Peter Tyler said: “July saw steady growth in gross mortgage lending, driven largely by remortgaging as homeowners locked into attractive deals in anticipation of the recent base rate rise.
“However, the broader economic outlook remains mixed, with households continuing to see their incomes being squeezed by rising inflation. This may explain the shift towards deposits held in instant access accounts, as consumers opt to keep their money close to hand.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Lenders remain keen to lend and offer competitive products, particularly in the remortgage space.
“With other incentives such as cash back increasingly being offered to those remortgaging, combined with fears of further potential rate rises, we expect this area of the market to remain particularly strong in coming months.”
No deal Brexit may bring stagnation
Richard Pike, sales and marketing director at Phoebus Software, said that July is a traditionally busy month in the property world, and it is encouraging to see a modest growth compared to the same month in 2017.
He added: “However, with so much speculation regarding the Brexit deal, or no deal, everywhere you turn at the moment it is likely to be reflected in the housing market in the coming months.
“When house buying is such a huge financial undertaking, the decision to move or buy has to be affected by consumer confidence, which is likely to be dented among the constant barrage of ‘deal or no deal’ speculation.
“The market has been propped up recently by the continuous buoyancy in remortgaging but, with few people now left on variable or tracker rates, this too is likely to slow.
“As we approach the deadline for Brexit even the threat of a no deal is likely to weigh heavy across our economy, how that will manifest itself in the housing market is difficult to predict, but it could bring along a period of stagnancy while people wait to see what happens.”
Jeremy Leaf, north London estate agent and former RICS residential chairman, said: “The rise in remortgaging demonstrates again homeowners trying to avoid interest rate rises but also shows a home mover market falling back at a time when we might have expected more activity.
“Clearly, stamp duty exemptions and help to buy are not sufficient even for first-time buyers to make a move and take advantage of buy-to-let investors suffering from tax and regulatory changes.
“On a slightly more positive note, we are not anticipating any great correction in the market but more of a continuance of up one month, down the next, in a broadly flat trend.”