Gross mortgage lending suffered a 7% monthly fall in December last year, according to latest data released by the Council of Mortgage Lenders (CML).
The total value of mortgages lent during the final month of 2012 dropped to £11.7 billion; below the £12.2 billion recorded in December 2011 and reflecting a 7% reduction compared with November's total of £12.6 billion.
Figures did reveal, however, that gross mortgage lending was £2 billion more in 2012 than in 2011, at £143 billion, up from £141 billion.
The CML is also optimistic that gross lending will reach £156 billion in 2013, as the positive effects of Government lending initiatives such as the £80-billion Funding for Lending Scheme filter through to the market.
Chief economist at the CML, Bob Pannell, said: "We are more positive about the UK housing market and wider economy than a year ago, despite economic headwinds and downside risks.
"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," he said.
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