The fall was consistent with unfavourable economic conditions for would-be borrowers including higher unemployment, declining consumer confidence and falling real household income, the regulator said in its Product Sales Data Report.
The FSA added it was also compatible with the decline in both the number of selling and provider firms between Q2 2010 and Q1 2011.
Of all the lenders that reported mortgages sales, the top five accounted for about 62% of all sales by volume, the top 10 for 83% and the top 20 for 94%.
The figures reflected the trend towards increased firm concentration as a result of mergers and acquisitions and firms leaving the market.
The top seven mortgage providers accounted for a substantial 83% of the market, followed by building societies and credit unions.
The remainder is accounted for by non-deposit takers, overseas banks and small provider firms.
Sales of mortgages to first-time buyers, remortgagors and home movers all fell in 2010/11 compared to 2009/10.
The proportion of interest-only mortgages with an unknown repayment vehicle has continued to decline from 13.5% in Q2 2010 to 10.8% in Q1 2011.
The proportion of mortgages sold with advice has decreased in the last year. This is consistent with the FSA’s observed decline in the relative importance of intermediaries.
The average age of first-time buyers remained virtually unchanged in 2010/11 versus 2009/10 at 30.8 years. The FSA said that in general, it seemed as if the tougher lending conditions and the general environment for first-time buyers, the older they are when they enter the mortgage market.
Between April 2010 and March 2011 some 539 firms provided PSD reports, with 181 reporting mortgages.
The PSD report covers direct regulated sales by firms’ own sales and sales made by intermediaries.
