There were 61,039 new mortgages approved in the final month of 2017 – the weakest number since January 2015.
At the same time, remortgaging deals fell to 46,475, after jumping above 50,000 in both October and November.
New buyer demand is expected to remain flat in the coming months.
However, lenders are still pricing competitive deals, which should buoy the market, according to Jonathan Harris, director of mortgage broker Anderson Harris.
He said: “Lending for purchases and remortgaging fell in December, in line with other surveys, as the market slowed down in the run up to the festive period.
“This did follow busy months in October and November but still, house purchase approvals were at their lowest levels since January 2015.
“Looking forward, with lenders keen to lend and the average pricing of two- and five-year fixed-rate mortgages continuing to fall, there will be plenty of competitive deals to tempt those buyers willing to take the plunge in the next few weeks.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “What we have seen since on the ground is viewing numbers well up on this time last year but it remains to be seen whether this translates into sales in the next month or two.
“We are waiting for more commitment from buyers before deciding whether this is going to be a better-than-anticipated start to 2018.”
