The number of mortgages issued and the amount of money borrowed both dropped in July, new figures from the Council of Mortgage Lenders (CML) have revealed.

According to the organisation, there were 94,000 loans issued to borrowers purchasing a home, totalling £14.8 billion, and a further 92,000 loans worth £11.5 billion to those re-mortgaging their property.

Some 79 per cent were fixed-rate deals but the CML warned that their popularity may not last if people believe interest rate will not rise any higher.

Michael Coogan, director general of the CML, warned that although "we cannot read too much into a single month''s figures", they could indicate that a slowdown in the mortgage and housing markets is near.

However, recent turmoil on world financial markets has led some analysts to believe that banks may increase the mortgage rates they offer, despite the Bank of England''s decision to hold interest rates earlier this month.