Buy-to-let lending for house purchase plunged by nearly 80% year-on-year in March, figures from banks and building societies show.
Landlords borrowed a total of £900 million for house purchases in March, marking a 79.5% decrease compared with March 2016, when £4.4 billion-worth of loans were advanced for this purpose.
The Council of Mortgage Lenders (CML), which released the figures, said spring 2016 saw a peak of activity before stamp duty changes were introduced in April last year.
Estate agents reported seeing a rush of buy-to-let investors snapping up properties ahead of the stamp duty increase for this sector on April 1 2016.
Paul Smee, director general of the CML, said: "Overall, lending trends have remained reasonably consistent."
The CML also said first-time buyer and home mover activity came out of a winter seasonal dip in March. First-time buyers borrowed £4.9 billion in total in March, up 29% on February and a 9% increase compared with March 2016.
Home movers borrowed £6.2 billion for house purchases, up 19% on February but down by 33% year-on-year.
A total of £6 billion was also borrowed by home owners re-mortgaging in March - up 13% on February and a 22% increase compared with the same period a year earlier.
But the CML said that, overall, home owner house purchase activity was at its weakest for two years across the first three months of 2017, with 155,900 loans advanced to first-time buyers and home movers in the first quarter of this year.
By contrast, the number of re-mortgage loans advanced to home owners was at its highest since the first quarter of 2009, with 106,700 loans handed out in the first three months of 2017.
Mr Smee said: "The relatively sluggish activity among home movers stands in contrast to the growth in first-time buyer and re-mortgage activity, but in aggregate the market is showing broadly the levels of activity we expected.
"As we head into the summer, we expect a continuation of these trends, with both first-time buyer and re-mortgage lending expected to maintain momentum in the light of the very attractive deals currently available."
A fresh mortgage price war has broken out in recent weeks, with some lenders offering some of their lowest ever rates.
Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said the figures show that "realistic buyers and sellers are getting on with their business".
He said: "Putting these and other figures into perspective, we are finding on the ground that those prepared to be realistic are buying whereas those who have not yet come to terms with changing market conditions are staying put."