The spike in activity was caused in part by a rush to buy properties under £175,000, before the Stamp Duty concession finished at the end of the year.

There were 24,900 loans to first-time buyers in December, the highest number since November 2007. At £2.9bn, first-time buyer loans rose 26% from November both by volume and value.

Despite the positive results for first-time buyer loans, the overall lending figures were weaker than in previous years. Total lending was £143.6bn, down 43% from £254.1bn in 2008 and 60% lower than the record high of £362.6bn in 2007.

The CML also published a research article examining the different measures of mortgage affordability. Research author Bob Pannell said: “With 90% of loans advanced in December being repayment mortgages, it would seem appropriate to take capital payments into account when assessing affordability.

“Typical capital and interest payments for a recent first-time buyer would represent about 21% of pre-tax income. This is considerably more than the 14-15% that mortgage interest costs alone would be, and demonstrates why using initial mortgage interest costs to assess affordability risks giving a flattering picture.”

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