Lloyds Banking Group lent 19.1 per cent less to mortgage borrowers in the first half of the year than it did in the first half of 2014.
Its half-year report, published today, shows the group lent £16bn to borrowers in the first six months of the year, down from £19.8bn in the same period last year.
Lloyds claims to provide one in four mortgages to first time buyers and says it has lent £2.5bn through the Help to Buy mortgage guarantee scheme since it launched.
The results also show it has set aside an additional £1.4bn to pay claims for missold payment protection insurance, taking its total PPI provision to £13.4bn.
Lloyds says it is continuing to see complaints driven by claims management firms, and is paying out higher than expected average compensation.
The bank has posted a pre-tax profit of £1.2bn for the first six months of the year, up 38 per cent from £863m at the same time last year.