Figures from the Council of Mortgage Lenders show total gross remortgage lending also fell 8 per cent over the same period, down from £11.4bn to £10.5bn.
LMS estimates that the total number of remortgage loans in February decreased by 12.4 per cent to 17,812, compared with 20,332 in January.
LMS chief executive Andy Knee says: “February’s monthly 11.3 per cent dip in remortgage lending can at least partly be attributed to a lull in remortgage applications over the Christmas and New Year period. However, the fact that it was still annually down by 1.8 per cent suggests that the FLS still needs more time to bed in and we would urge the Government to continue with the scheme in its current form. This is hopefully now looking more likely in light of the Chancellor’s Budget statement.
“An extension of the FLS, together with continuing falls in mortgage rates for both new and existing borrowers, suggests that all types of mortgage lending should grow strongly over the coming months.”