Gross mortgage lending was £15.5 billion last month, according to estimates from the Council of Mortgage Lenders (CML).

This is down 8% compared to the gross lending total of December 2013; however, it is a third higher than January 2013 (£11.6 billion).

The CML’s chief economist, Bob Pannell, said: “Housing market indicators in the UK continue to be positive, although seasonal factors are likely to have affected activity levels. Monthly approvals for house purchase averaged 70,000 in the final quarter of 2013, the strongest for six years.

“The Bank of England envisages that approvals may climb to 90,000 a month in the second and third quarters of 2014. This would seem to imply property transactions running at an annualised rate of one and a half million or so. We think this may be over-optimistic given the growing anecdotal reports of a shortage of prospective sellers.”

“This minor monthly blip in mortgage lending does not paint the full picture of the market at the moment, and lenders have been doing a brisk business in the first six weeks of the year compared to last year,” said Henry Woodcock, principle mortgage consultant at IRESS.

“First-time buyer demand has provided the building blocks for a strong mortgage market, with government initiatives such as Help to Buy playing their part. With Mark Carney unlikely to raise rates in the near future, mortgage rates shouldn’t sky-rocket in the short-term, and demand for finance is unlikely to crumble any time soon.

“However, despite the progress we have seen, we expect the market to hit a speed bump in the second quarter this year as lenders and borrowers alike come to terms with new regulations post MMR, when the process of securing a mortgage will lengthen and become more complex. More detailed affordability testing will increase the chance of applications being declined initially. How lenders, brokers and consumers come to terms with the changes in April may be the making or breaking of the market in 2014.”