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Despite being bigger than the decline of up to four per cent that is often experienced in the first two months of the year, the findings are in line with the CML's forecast of £145 billion gross mortgage lending this year.
Michael Coogan, director general of the CML, said the ability of banks and building societies to lend money has been hampered by the fact that more people are deciding to put their cash in National Savings and Investments.
He commented: "This is yet another example of fractured policy. There are now fewer active lenders in the market, but the government wants them to lend more."
With a membership accounting for around 98 per cent of the UK's residential mortgage lenders, the CML is the trade association for the mortgage lending industry.
