This represents a 12% drop from £13.2 billion in November but a 12% rise from December 2010 (£10.5 billion). December was the fifth month in a row of higher year-on-year lending.
Lending totalled an estimated £37.3 billion in the fourth quarter of last year, down from £39.2 billion in the previous quarter but 11% higher than the last three months of 2010 (£33.6 billion).
For 2011 as a whole, estimated lending totalled £140 billion, slightly above our annual forecast of £138 billion. This is up 3% from £136 billion in 2010.
CML chief economist, Bob Pannell observes:
"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."
Dominic Hennessy, managing director of the mortgage brokers Just Us mortgages, commented:
"Despite a brief rally in November, the mortgage market ended 2011 with a whimper rather than a bang. For many in the industry, it was frankly a year best forgotten. Total lending was only a whisker better than it was in 2010.
"But the lenders cannot blame this solely on the gloomy economic picture. The mess is partly of their own making.
"Despite rock bottom interest rates making mortgages cheaper than they have been for years, lenders are still very choosy about who they will lend to. Anyone self-employed or with anything less than a flawless credit score isn't even in the game.
"The size of deposit demanded by the lenders is still putting a mortgage beyond the reach of many would-be first time buyers.
"Demand is there, but it remains deeply fragile. Consumer confidence is extremely weak as people worry about losing their jobs.
"The banks too are deeply worried at the prospect of eurozone collapse, and are already facing tougher borrowing conditions in the wholesale money markets.
"It's very telling that a steadily increasing proportion of new mortgage lending is to the buy to let market. These sorts of loans offer the lenders the chance to charge higher rates and fees. But they hardly betoken a healthy or thriving mortgage market.
"As consumer confidence continues to wallow in the post-Christmas gloom, things are unlikely to improve soon."
Paul Hunt, managing director Phoebus Software said:
“The annual increase in gross lending isn’t large enough to indicate the market is returning to the levels seen a few years ago, but it’s very encouraging nonetheless.
"In the second half of 2011, the eurozone crisis and the resulting rise in LIBOR could have caused lenders to retreat into their shells to weather possible defaults in Greece and beyond.
"But in fact lenders have demonstrated they are prepared to support the property market in the UK as far as is possible. On a seasonally adjusted basis, gross lending rose in seven of the last eight months, which last happened in 2009.
"2012 will certainly offer major challenges to lenders hoping to expand their activities in the UK, but their efforts in the latter part of 2011 demonstrate they are well prepared to meet them”.
Peter Rollings, CEO of estate agent Marsh & Parsons, comments:
“The consistent annual improvement in lending in the last few months should go some way towards dispelling the doom and gloom surrounding the current mortgage market.
"Although the Eurozone crisis still lingers in the background, lenders are acclimatising to the difficult economic environment and improving their offering to borrowers nonetheless.
"For instance, HSBC recently pledged to boost its level of support to the mortgage market this year – a welcome sign of confidence in the direction of housing market.
"While we don’t anticipate mortgage lending to return to anywhere near it’s pre-crunch peak level, if other lenders follow suit and lending conditions continue to improve, we may see the wider national housing market moving in the same direction as London as the year progresses.”
Charles Haresnape, Managing Director of Aldermore Residential Mortgages, said:
"The latest lending figures from the CML indicate that we may well have reached the bottom of the cycle back in 2011 and are now starting to head in the right direction once again.
"Recovery is going to be long and slow but there are, at long last, reasons to be optimistic; lending is increasing month-by-month and interest rates remain at historically low levels which makes borrowing very affordable. Inflation, which puts personal budgets under pressure, is also starting to fall.
"What we need now is for the problems in the Eurozone to stabilise and for a restoration of consumer confidence."
David Brown, commercial director of LSL Property Services, comments:
“Improved mortgage lending in the second half of last year defied the difficult economic backdrop and impact of the eurozone crisis.
"While house purchase lending showed signs of improving, there was also a renewed appetite for mortgage finance from property investors keen to exploit low rates, healthy yields and
