Gross lending in secured loans totalled £351.9 million in 2012, according to the latest Secured Loan Index from Loans Warehouse.

The rise exceeds the forecasts made in September’s Index, which predicted gross lending would reach £350 million.

Overall secured loan lending last year increased 23% from 2011’s total of £286 million, Loans Warehouse said.

Gross lending for the fourth quarter of 2012 was £90.7 million, a 27.7% increase on the same period in 2011, where the figure was £71 million.

£24.5 million was lent in December by UK secured loan lenders, which is a 22.5% increase on the £20 million written in December 2011 and 28.6% lower than November’s gross lending figure of £34.3 million, reflecting the effects of a shorter working month.

December was the 14th month in a row of higher year-on-year lending and was the best December the industry has seen since 2009, where £30m was advanced.

Matt Tristram, joint managing director of Loans Warehouse, said: “Last year saw a real strengthening of the market and our data shows despite the decrease in lending, the secured loans market was still strong in December.

“If we work on the assumption that there were only 15 working days in December, compared to the 23 in November as most of the industry closed early for Christmas, the average lending figure is £1.7 million per day. If December had consisted of only another eight days and remained consistent, it would have been a record month for the industry, reaching £37.9 million.

“Secured loan rates fell to historic lows in the first week of 2013 and with loan options increasing, things have never been better for borrowers. Thanks to Nemo Personal Finance, rates now start from 5.59% which is the most competitive ever offered by a lender and available to homeowners with a maximum LTV of 55% looking to borrow between £40,000 and £200,000.

“Borrowers will benefit greatly from these rates; especially those seeking value over a longer term. In many instances, a secured loan will now work out cheaper than a full remortgage for a number of homeowners. If your client wants to avoid losing the benefits of their current mortgage, not to mention avoid the stiff early repayment charges or the costs involved in changing mortgage providers altogether- then a secured loan will be a cheaper alternative to remortgaging.”