"Overall remortgaging for both residential and buy-to-let properties have levelled out after a period of strong growth. "
First-time buyer completions fell by 4.5% while remortgages dipped by 0.6% and homemover mortgages slumped 8.4%.
Buy-to-let purchases continued to decrease, with 5,200 completions in September - 18.8% fewer than in September 2017.
Buy-to-let remortgages also fell by 0.8% by volume compared to 12 months ago.
Jackie Bennett, director of mortgages at UK Finance, said: “Overall remortgaging for both residential and buy-to-let properties have levelled out after a period of strong growth. This reflects the number of fixed rate loans reaching maturity.
“Buy-to-let home purchases have eased again in September, suggesting lending in this market remains subdued as a result of recent tax, regulatory and legislative changes.
“Demand for house purchases for both first-time buyers and homemovers has also lessened, as affordability constraints continue to bear down on consumer demand for new loans particularly in London and the South East.”
Mark Harris, chief executive of SPF Private Clients, commented: "The UK Finance figures don’t appear to take into account product transfers, which will have a significant impact on remortgage numbers. This market is much larger today than 12 months ago as borrowers opt for the simpler process of sticking with the same lender and moving onto another rate, rather than starting a new application with another lender.
"The mortgage market is inevitably subdued as people delaying decision-making while the political and economic uncertainty continues. This is likely to continue into the spring, until we pass the Brexit deadline in March, by which point some of that pent-up demand may be released and the market could well pick up."
Jeremy Leaf, north London estate agent and former RICS residential chairman, added: "These figures are an important indicator of the future direction of the housing market. They are showing, once again, that activity is softening but Brexit is not the only culprit. Affordability concerns continue to weigh heavily in many areas, although there is more resilience outside London and the South East.
"Buy-to-let investors are still not returning to the market or buying for the first time in sufficient quantities to provide support at the bottom end of the market and first-time buyers are not taking up the slack. The result is a bit of a standoff until clearer political and economic direction becomes apparent."
