There were 10% fewer loans approved last year than in 2009, according to the British Bankers’ Association.

The annual growth in the banks’ net mortgage lending was 2.8% in December, above the 0.8% figure for the whole mortgage market in November.

The main banks’ net lending rose by £20 billion in 2010, in contrast to lending by all other lenders which decreased by around £12 billion.

BBA statistics director, David Dooks said: “Unsecured credit demand was also weak during last year