Gross mortgage lending fell marginally in December, said the Council of Mortgage Lenders, to £21.3 billion compared with £21.7 billion in November, and was 13% lower than the December 2003 figure of £24.6 billion. Total lending in 2004 reached just under £292 billion - 5% up on 2003.

Lending for house purchase accounted for £9.8 billion in December, up from £9.1 billion in November but 22% lower than the £12.6 billion recorded in December 2003. House purchase lending accounted for 46% of all lending, a little higher than the November proportion. For 2004 as a whole, lending for house purchase totalled £130.8 billion - 5% higher than in 2003. For the year as a whole, house purchase lending accounted for only 45% of the total - the same as in 2003 and the lowest annual figure since records began.

Out of a total 1.2m loans for house purchase in 2004, 31% were to first-time buyers, up a little from 29% in 2003. This means there were around 369,000 loans to first-time buyers in 2004, compared to 367,000 in 2003. These figures are both low by historical standards. The typical first-time buyer borrowed 86% of the value of the property, down from 89% 2003. As house prices have risen, buyers have needed to come up with higher deposits, which has accounted for this fall. Similarly, in 2004 home movers typically took out loans at 64% LTV, compared with 71% in 2003. In parallel, typical income multiples have risen, with first-time buyers in 2004 borrowing an average of 3 times their income and movers 2.9 times.

Remortgage lending in December totalled £9.4 billion, nearly 10% down on the November figure of £10.4 billion, but similar to last December's £9.5 billion. Remortgaging accounted for 44% of total lending in December, and 43% for the year as a whole. For 2004 as a whole, remortgaging accounted for £124.5 billion, little changed from the 2003 figure of £123.6 billion.

Interest rates to borrowers have risen over the year, reflecting the Bank of England base rate rises seen over the past 12 months. Typical rates at the end of 2004 were back to the levels last seen in 2001.

Commenting on the figures, CML Director General Michael Coogan said: "While 2004 as a whole showed an increase in year-on-year lending, the figures were indisputably weakening by the end of the year. Going into 2005, we expect the slowdown to continue into the spring. Over the year as a whole we anticipate a stable market, with a healthy level of activity but without the dramatic increases in house prices and lending volumes experienced in 2004. Against this backdrop, home-owners are likely to lose some of their appetite for borrowing against their housing equity, and first-time buyers may well see affordability constraints ease a little as their earnings have a chance to grow more quickly than house prices."