The Council of Mortgage Lenders (CML) has estimated that gross mortgage lending totalled £20.4 billion in December 2016.

This is 4% lower than November (£21.2 billion), and 4% higher than December 2015 (£19.7 billion).

It brings the estimated total for the year to £246 billion, a 12% increase on 2015’s £220 billion and the highest annual gross lending figure since 2008.

Gross mortgage lending for the fourth quarter of 2016 was therefore an estimated £62 billion. This is a 3% decrease on the third quarter and closely matches the 61.8 billion lent in the fourth quarter of 2015.

“The UK housing market, much like the wider UK economy, ended 2016 on a generally positive note,” said CML senior economist Mohammad Jamei.

“Approvals for house purchase have recovered strongly of late, and this should feed through to lending figures in the early months of 2017. The current availability of mortgage credit is benign, and the real issue continues to be a dearth of properties on the market, which adds to the challenges facing would-be buyers.

“Uncertainty associated with political factors and prospective changes to the tax treatment of landlords will weigh on prospects for the year ahead.”

Stephen Smith, director of Legal & General Housing Partnerships, added: “Today’s final figures for 2016 highlight the resilience of our nation’s housing market. Despite the market being plagued by economic uncertainty, gross lending still increased compared to 2015.

“As we welcome the start of a new year, sentiment across the mortgage market is certainly positive. With the Government’s Housing White Paper imminent, many in the industry will be focussed on how we can ensure lending levels continue last year’s strong performance by improving affordability and increasing fluidity across all levels of the housing market. Not only do we need to see significantly more homes being built every year to redress the supply/demand issue, but we also need to eliminate some of the barriers to moving that are currently preventing existing housing stock from coming back on to the market.

“Removing punitive taxes such as Stamp Duty to incentivise people looking to downsize, as well as aid first time buyers struggling with the costs of homeownership, would most definitely be a good place to start.”