Total loans secured on a property fell from 108,767 loans in January worth £13.1bn to 95,976 in February worth 11.7bn.
Within this overall figure loans for house purchase fell the hardest, from 57,899 in January worth £8.7bn to 48,986 in February worth £7.1bn.
On the plus side the Bank of England’s data also shows the average mortgage rate year-on-year for February has fallen from 3.63% to 3.50%, with the average floating rate sub-3%.
But Capital Economics says that while the fall can partly be explained by the end of the Stamp Duty holiday, banks tightening up their credit scoring criteria has also played its part.
Paul Diggle, property economist at Capital Economics, says: “Demand for mortgages rose at the fastest rate for two years in Q1, and lenders reported that the overall supply was unchanged.
“However a majority reported that credit scoring criteria were tightened and that the share of applications being turned down had increased.
“Moreover, most lenders expect the upward pressure on mortgage interest rates to be maintained and anticipate reducing the availability of mortgages in the next three months.”