February saw a 21 per cent decline in the number of mortgages being handed out to prospective buyers when compared to January, according to the latest Mortgage Monitor carried out by e.surv.
And with the stamp duty holiday set to finish on March 24th, the end of the initiative is being highlighted as the reason for the sharp drop in numbers of those who are looking to buy property.
Where the figures for the first month of 2012 showed an annual growth rate in the number of mortgage approvals of 29.6 per cent, the February statistics have seen that year-on-year level drop to just 1.6 per cent, reflecting the sudden weakening of interest in the market that many have predicted.
Indeed, loans for houses under £250,000 - the tax threshold in place under the current stamp duty holiday - fell by nearly 10,000 in the space of a month, further indicating that many first-time buyers look set to give up on purchasing a home once the standard system returns.
With so many seemingly dropping out of the buying market, the growth witnessed in the private rented sector in recent times could well be provided with an added stimulus.
Investors may experience an increase in demand for their properties, making proper management and insurance for landlords essential to protecting their assets.
Richard Sexton, director of e.surv, said: "The first-time buyer market looks set to enter a trough as it rebalances itself in the aftermath of the swollen activity of the last few months."
Given that e.surv's research also shows that the average loan-to-value on a mortgage fell for the third consecutive month - now standing at 61 per cent - it seems first-time buyers will find it increasingly difficult to secure the financial support needed to buy a home once the stamp duty holiday comes to an end.