Gross mortgage lending fell by 6% in December to an estimated £26.3 billion according to the latest data from the Council of Mortgage Lenders.

However, this was 25% stronger than the £21 billion achieved in December 2004 and is the strongest figure for December on record. The figures also show that gross lending in 2005 totalled £287.5 billion, down by only 1% on the record £291.2 billion in 2004.

Lending typically declines towards the end of the year, but the fall in December was less than in previous years.

Commenting on today's figures, CML director general Michael Coogan said: "The commentators who thought lending would fall sharply in 2005 based on the performance of the first half of the year were wrong."

"Confidence in the housing market was supported by the realisation that short-term interest rates had peaked and the downward trend in fixed-term rates throughout much of the year, resulting in stable house prices."

"The second half of 2005 was characterised by strengthening housing market activity and increased mortgage lending. We expect this trend to continue into 2006 as mortgage approvals continue to rise. Against this background, house prices should remain resilient in the coming months."

The British Bankers' Association also released lending figures today saying that underlying mortgage lending in December rose by an underlying £5.4bn; the strongest rise since June 2004, a little higher than November's rise of +£5.2bn and well up on the average of +£4.6bn over the previous six months.

"Mortgage lending strengthened in the final months of the year, but in sharp contrast, unsecured lending continued to be noticeably subdued," said BBA director of statistics David Dooks.