Total gross mortgage lending fell to £10.4 billion in January, according to the Council of Mortgage Lenders (CML).

This is 9% lower than December’s gross lending figure of £11.4 billion and a 3% fall from £10.7 billion in January 2012.

“Housing sentiment remains positive, despite ongoing economic pressures,” said CML market and data analyst Caroline Purdey.

“A worsening in the outlook for inflation presents a greater headwind, but we still expect the funding for lending scheme to lift activity over coming months.

“House purchase activity was robust into the start of 2013, on the back of better mortgage availability and pricing, and we share the Bank of England’s confidence that this will continue over the coming months.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “While the general mood regarding the housing market has been one of increased confidence as Funding for Lending pushes down borrowing rates, the fall in gross mortgage lending in January shows we are not out of the woods just yet. December was a strong month for lending volumes but they took a hit last month as the bad weather had an impact.

“However, the outlook is still positive, despite the persistence of wider economic pressures. The FLS is resulting in lower mortgage rates across the loan-to-value bands, giving us some of the cheapest mortgage rates ever seen. This is increasingly important because of the other issues in the economy and will be essential if housing purchase activity is to remain robust this year, as we expect it to.

“Buy-to-let continues its recovery with mortgage rates falling, particularly on fixed-rate deals. As many first-time buyers struggle to get on the housing ladder, they are forced to rent for longer, persuading investors that the buy-to-let market presents the potential of better returns than cash or equities.

“As the cost of borrowing falls across the market, with rates on higher LTVs looking increasingly attractive, first-time buyers are able to put down more modest deposits. This is helping boost their numbers, with 2012 seeing the largest number of first-time buyers in five years. The growth in their number is significant for the health of the housing market and will fuel further growth.

“Most importantly for a market that rests on confidence, optimism in the housing market continues, despite the blip in January figures. The mortgage market is still constrained when you compare it with what it was at the height of the housing boom but it is showing some signs of improvement.”