Figures from the Council of Mortgage Lenders trade body showed gross mortgage lending was £13.4bn in February, 9% down on both the previous month and the same point last year.

Andy Knee, chief executive of LMS, said this showed the mortgage market was still facing problems, especially with an influx of older buyers expected in the next few months.

“During an ordinary February, the lull in mortgage lending could be shrugged off as seasonality, but in this case, it’s disappointing that we’re not seeing a pick-up in lending given we’re just weeks away from pension freedoms day,” he said.

“With access to their pension pots, there is a strong possibility the silver pound will look to invest their pension in buy-to-let properties, which could put a further strain on first-time buyer prospects of fulfilling their aspirations of home ownership.”

Monthly mortgage lending was at its lowest for nearly two years and Knee said the creation of a Help to Buy ISA, announced in the Budget earlier this week, would not help Britain solve its housing crisis.

“The Chancellor’s announcement of a Help to Buy ISA provides some much needed support for first-time buyers, but fails to address the problem at the crux of the issue: a lack of supply,” he added.

Brian Murphy, head of lending at Mortgage Advice Bureau, was more upbeat and said political parties of all colours viewed housing as a key election issue.

“While the newly announced Help to Buy ISA will not come into play until after the election, first time buyers are likely to remain a key focus for policymakers – especially as January showed lending to this segment had declined,” he said.