Total mortgage lending dropped by six per cent last month, to around £26.3 billion, according to the figures from the Council of Mortgage Lenders (CML).

Total mortgage lending dropped by six per cent last month, to around £26.3 billion, according to the figures from the Council of Mortgage Lenders (CML).

However, the trade association reported that this was 25 per cent stronger than the previous December's total of £21 billion.

Lenders say that borrowing usually falls during December, but 2005's fall was less than previous years and signals the strongest December figure on record.

The data also reveals that gross lending in 2005, calculated at £287.5 billion was down by just one per cent on the record year before.

Michael Coogan, director general of CML, said that commentators who believed lending would drop substantially in 2005 because of the performance of the first half of the year, had got it wrong.

He said: "Confidence in the housing market was supported by the realisation that short-term interest rates had peaked and the downward trend in fixed-term rates throughout much of the year, resulting in stable house prices.

"The second half of 2005 was characterised by strengthening housing market activity and increased mortgage lending. We expect this trend to continue into 2006 as mortgage approvals continue to rise."

He added that in this environment, house prices should remain "resilient" in the next few months.