The BoE Lending to Individuals statistics for August show that the figure is also down from the previous six-month average of £6bn.
The data reveals that the number of loans approved for house purchase has also fallen from 33,000 in July to 32,000 in August.
The number of remortgages has dropped to 64,000 compared to 69,000 in July.
The increase in net consumer credit in August was above the £1.1bn levels seen in July, at £1.2bn.
The only other sector to outperform July’s figures was seen in net credit card lending, which rose by £0.7bn.
Nicholas Leeming, client director of propertyfinder.com, says: “A glimmer of hope returned to the housing market at the start of September as mortgage market conditions improved and buyer interest tentatively returned.
“But the brief surge of confidence has now been swept aside by the events of the last couple of weeks.
“The government and the BoE must take immediate further concerted action to ease market fears, improve liquidity in capital markets and enforce competitive behaviour between mortgage lenders.”
Michael Coogan, director general of the Council of Mortgage Lenders, says: “Gross mortgage lending, but more particularly net mortgage lending, fell sharply in August, according to the Bank of England. It is quite possible that we could see an overall shrinkage in the size of the mortgage market in the short term.
“The general downturn in lending will not have been helped by the speculation earlier in the year about stamp duty, which may have affected these figures.
“Against this backdrop, lenders deserve recognition for attempting to maintain a flow of mortgages into the market despite pricing volatility, scarcity of funding, and falling house prices.
“We welcome the government’s attempts to foster greater certainty in the current uncertain market, and we await with interest news of the Crosby recommendations on what measures may be planned to improve the mortgage funding market.”