Gross mortgage lending totalled £11.7bn in December 2011, 12 per cent higher than the same period a year ago, according to data from the Council of Mortgage Lenders.
On a monthly basis, however, gross lending fell by 12 per cent from the £13.2bn advanced in November.
In Q4 2011 as a whole, gross mortgage lending totalled £37.3bn, down from £39.2bn in Q3 but 11 per cent higher when compared to the same period in 2010.
CML chief economist Bob Pannell says: “The closing months of 2011 saw stronger mortgage lending activity and housing transactions, despite the fact that short-term economic prospects are challenging.
“There is a glimmer of light ahead for households in that real incomes could stabilise and perhaps even start rising by the end of the year.
“But, continuing eurozone problems mean that mortgage funding prospects are uncertain, so overall UK mortgage market conditions for the year ahead remain difficult to call.”