MORTGAGE lending was down by nearly a fifth in March compared with a year earlier, figures from banks and building societies show.
An estimated £21.4 billion worth of home loans were handed out last month - marking a 19 per cent decrease compared with March 2016, the Council of Mortgage Lenders (CML) said.
The CML said mortgage lending appears to be in "neutral gear" - and it does not expect the general election on June 8 to have a marked effect on lending.
The sharp year-on-year fall in lending was expected, the CML said.
In spring 2016, there had been significant increases in activity as borrowers rushed to beat a stamp duty hike that was imposed on people buying second homes, including buy-to-let investors, on April 1 2016.
The mortgage lending total for March 2017 was still a 19 per cent jump compared with the previous month, with £17.9 billion worth of home loans advanced in February.
The CML said in total, around £59.1 billion worth of mortgages were handed out in the first three months of 2017, marking a 4 per cent decrease on the fourth quarter of last year and a 6 per cent decrease on the £63 billion lent in the first quarter of 2016.
CML senior economist Mohammad Jamei said: "Mortgage lending appears to be in neutral gear.
"Our gross estimate for March is £21.4 billion and this is broadly in line with average monthly lending over the past year.
"Within this aggregate level, there has been a shift towards first-time buyer and re-mortgage customers, away from home movers and buy-to-let landlords.
"We expect this profile to continue over the short term, as low mortgage rates encourage existing borrowers to re-mortgage and government schemes help first-time buyers.
"We do not expect any marked effect from the general election."
Howard Archer, an economist at IHS Markit, said: "We share the CML's view that June's general election is unlikely to materially affect the housing market.
"Consequently, we believe house price gains over 2017 will be limited to no more than 2.5 per cent - and there is a very real possibility that it could come in lower than that."
Jonathan Harris, director of mortgage broker Anderson Harris, said: "The mortgage market continues to tick along with competitive products on offer to those borrowers who are getting on with the business of buying and selling, or re-mortgaging their homes."
