Mortgage approvals recovered slightly last month after plunging to an 18-month low, Bank of England figures showed today.
There were 47,312 approvals for house purchase in July worth £7.1 billion, an increase on just over 44,000 in June, which was the lowest figure in a year and a half.
But analysts said that weak credit growth is likely to continue to act as a "brake on the economy" for some time, despite the Bank of England and the Treasury's recently-launched funding for lending scheme to unclog the flow of credit.
The latest mortgage approval figure remains below the more than 50,000 approvals seen in May and the funding for lending scheme has not stopped Nationwide and Santander announcing mortgage rate increases.
Borrowers have faced a tougher time trying to take out a mortgage in recent months as lenders generally have been tightening their borrowing criteria, causing a drop in the proportion of mortgages approved.
Today's figures also showed that remortgaging approvals were slightly up in July, with 25,273 approvals worth £3.4 billion, although like the house purchase figures, remortgaging approvals were lower than those seen in May.
Samuel Tombs, an economist for Capital Economics, said: "While the number of mortgages approved for new house purchase rose from 44,124 to 47,312, this only reversed about half of the fall in June and left approvals still some 8% below the average level seen in the previous 12 months.
"Looking ahead, credit might have become easier to obtain now that the funding for lending scheme is up and running.
"That said, the scheme has not prevented some lenders from increasing their borrowing rates recently. Indeed, we think that weak money and credit growth is likely to act as a brake on the economy for some time to come."
Research from comparison website MoneySupermarket recently found that the choice of mortgages for first-time buyers and people with deposits of 10% or less has shrunk back significantly in the last six months.
Jonathan Harris, director of mortgage broker Anderson Harris, said: "It is too early to say what impact the funding for lending scheme will have.
"There are fewer deals available at higher loans-to-value than a year ago, so this needs urgently addressing if it is to be a success and to give the housing market the kickstart it so desperately needs."
Meanwhile, credit card lending has seen its biggest decrease in six years, the Bank of England figures showed.
Credit card lending decreased by £147 million in July, the sharpest fall recorded since a £150 million decline in August 2006.
Analysts have said that the uncertain economy and worries about job security have encouraged households to act cautiously and try not to take on new debt.
A recent PricewaterhouseCoopers (PwC) report has also argued that credit card use could fall into permanent decline, with the rise of digital technology and payday lenders changing how people access credit.
Consumer credit, which includes credit cards, decreased by £220 million in July, the biggest drop seen since February this year, today's figures showed.
Personal loans and advances, which are also included in consumer credit, declined by £73 million, a slightly smaller decrease than another fall recorded the previous month.
The Bank of England said its consumer credit figures do not include student loans.