"The fall in new business volumes in September comes amid subdued consumer confidence which has affected the housing market as a whole."
The market had seen six months of growth following six consecutive months of decline starting in August 2016.
The FLA says the fall in new business is due to "subdued consumer confidence".
The data also shows that the number of second charge mortgage repossessions in Q3 2017 was 23, 25.8% lower than in the same quarter in 2016.
Fiona Hoyle, Head of Consumer and Mortgage Finance at the FLA, said: “The fall in new business volumes in September comes amid subdued consumer confidence which has affected the housing market as a whole. It follows six consecutive months of growth in second charge mortgage new business volumes which grew by 11% in the first nine months of 2017 to 16,043.
“Lenders are continuing to embed the new regulatory regime which puts first and second charge mortgage regulation on the same footing.
“The fall in second charge mortgage repossessions in Q3 further demonstrates lenders’ commitment to helping customers in financial difficulty.
“The number of repossessions in 2017 as a whole is expected to be at a similar level, or slightly lower, than in 2016.”