Figures from the Council of Mortgage Lenders (CML) show that gross lending fell by 14% between December and January, to £14.3 billion.
This also represented a fall of 11% on January 2014.
The CML's chief economist Bob Pannell said that the slower pace of mortgage approvals in the second half of last year were to blame for January's weak showing.
"Although seasonal factors will continue to weigh on activity levels for a while longer, we expect the underlying picture to pick up over the coming months, in line with stronger earnings and employment, gentle interest rate trends and recent stamp duty changes," Pannell added.
"As we forecast at the end of last year, gross mortgage lending remains on course to reach an expected £222 billion this year."
Jeremy Duncombe, director of the Legal & General Mortgage Club, agreed that the pace of lending was likely to pick up over the course of 2015.
"Low inflation and low interest rates will continue to create good conditions for lending both for home buyers and remortgages," he said. "We expect gross mortgage lending to reach £225 billion this year as more people look to move house in 2015 and with favourable market conditions acting as tailwind it's very likely we will see uplift on the £205.6 billion we saw in 2014."
The stamp duty reform introduced in December was another factor pushing activity levels up before the end of the year, said Mark Harris, chief executive of mortgage broker SPF Private Clients.
"Subsequently, January was always going to be rather quieter," Harris said. "Lending volumes were also subdued compared with January last year, when the housing market was in the throes of a boom. That is no bad thing as a more sustainable and measured market emerges."
Harris added that lenders were busy competing for business with lower and lower rates.
"The next step is to start to ease criteria. A couple of building societies - the Ipswich and the Melton - have this week said they will consider lending to borrowers transferring from other lenders under the transitional arrangements in the Mortgage Market Review."
Harris said: "This is a crucial step and could be a lifeline for mortgage prisoners who are a good credit risk but are struggling to remortgage because they are self-employed, require interest-only or are 50-plus. We expect other lenders to follow suit."
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