During 2012, approvals for house purchase were 2% lower than in 2011 but ended the year a little stronger with some reports that more first-time buyers were entering the market, the British Bankers’ Association has reported.

The average house purchase approval fell to £151,100.

Approvals in 2012 for remortgaging and other loans were some 23% and 21% lower respectively than in 2011 reflecting lower activity in the housing market.

The current average total of 63,000 approvals a month compares with 230,000 a month in the peak year of 2003.

Gross mortgage lending of £8.5bn in December was £1.1bn above the recent monthly average.

Historically, the difference between gross lending and capital repayment produced positive net lending data each month. With lower levels of gross lending and high capital repayments being maintained in the light of low interest rates, net lending gradually reduced to a flat balance through much of 2012. Higher gross lending in Q4 has generated a ‘tick-up’ in net lending, the BBA said.

Nick Hopkinson, director of property company, PPR Estates, said: “Today’s final report from the high-street banks signs off on a terribly depressing year for lending with home owners and businesses alike suffering reduced finance availability. Net lending growth in all major categories was down on 2011 for the major banks.

“Looking at new mortgage lending, even with the much heralded Funding for Lending Scheme in-place, approvals were still down in December on this time last year. In fact, the high-street banks are currently approving circa less than 27% of the loan numbers for house purchase they were before the credit crunch. It’s clear the banks have a long way to go before they are really open for business and are still struggling will billions of pounds of bad debts in the background.

“It’s also distressing to see they are simply squeezing savers now they are getting cheap money from the Government – this tells us all we need to know about their collective moral consciences, once again.”