MORTGAGE lending to first-time buyers and home movers slipped back by around one quarter at the start of this year, banks and building societies have reported.

By contrast, lending to buy-to-let investors is continuing to go from strength to strength, figures from the Council of Mortgage Lenders (CML) show.

Housing market experts are predicting further interest in the buy-to-let market in the coming months from people looking to use some of their pension pot to invest in a property.

The CML said that lending to first-time buyers in January was at its lowest level for 21 months.

It said that 19,000 home loans with a collective value of £2.8 billion were handed out to people taking their first step on the property ladder in January, which is a 27% fall compared with December.

Meanwhile, 22,400 loans worth £4.2 billion were handed out to home movers in January. This marked a 24% decline from the previous month.

Paul Smee, director general of the the Council of Mortgage Lenders, said the falling figures reflect the "traditional seasonal lull" At the start of every year.

However, this year the lull has been more pronounced than it was in January 2014.

The CML said that 14% fewer loans were handed out to first-time buyers and 17% fewer were advanced to home movers in January this year compared with the same month a year earlier.

Mr Smee said: "Affordability constraints remain a factor for would-be borrowers, but we are still projecting lending to pick up over the next few months."

Experts have said that the forthcoming general election could cause some disruption to housing market activity in the coming months. A shortage of homes on the market to choose from has also been cited in housing market reports as a potential stumbling block for home buyers.

The CML's figures also show that 18,200 buy-to-let loans worth a total of £2.5 billion were advanced in January, up 5% on the previous month and 12% on the same month a year earlier.

It said buy-to-let figures were boosted by a significant increase in remortgaging, despite a slowdown in lending for house purchase.

Earlier this week, property website Rightmove said that a potential increase in retirees looking to snap up buy-to-let properties in the coming months could drive house prices higher.

Rightmove said that buy-to-let investors cashing in their pension pots after the new pension freedoms come into force on April 6 in order to invest in the buy-to-let market may push prices up in particular at the "starter home" end of the market, meaning that first-time buyers could face tougher competition for homes.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "Buy-to-let continues to go from strength to strength and interest in the sector is set to continue when pension rules are relaxed next month."

He said that a combination of cheap mortgage deals, the prospect of decent returns due to strong demand from tenants and the poor returns by comparison that investors could get by keeping their money in savings, are helping to fuel interest in the buy-to-let sector.