Gross mortgage lending in December reached an estimated £11.7bn, down 4.2 per cent year-on-year from £12.2bn a year before, according to figures from the Council of Mortgage Lenders.
This brings the estimated total for the year to £143bn, up from £141bn in 2011.
December’s gross lending was down 7 per cent on November’s total of £12.6bn.
The CML forecasts gross lending will reach £156bn in 2013.
CML chief economist Bob Pannell says: “We are more positive about the UK housing market and wider economy than a year ago, despite economic headwinds and downside risks.
“A key reason is that lenders currently face few funding pressures, in part reflecting the funding for lending scheme.
“House purchase activity was robust in the fourth quarter, on the back of better mortgage availability and pricing, and we expect this to continue over the coming months.”