By Daniel Hunter

Gross mortgage lending in December reached an estimated £11.7 billion, according to the Council of Mortgage Lenders (CML).

This brings the estimated total for the year to £143 billion, up from £141 billion in 2011. In 2013, the CML forecasts gross lending will reach £156 billion.

Commenting on market conditions in this month's Market Commentary, CML chief economist Bob Pannell observes:

"We are more positive about the UK housing market and wider economy than a year ago, despite economic headwinds and downside risks.

"A key reason is that lenders currently face few funding pressures, in part reflecting the funding for lending scheme.

"House purchase activity was robust in the fourth quarter, on the back of better mortgage availability and pricing, and we expect this to continue over the coming months."

Ashley Brown, director of the independent mortgage broker Moneysprite, believes the CML prediction is a bold one.

"The CML forecasts gross lending in 2013 will be up 9% on 2012. That's a bold statement to make and dependent on a number of factors working in the market's favour," he said.

"Lenders have to remain hungry to compete for customers, because borrowers have been taking advantage of some of the best mortgage deals in the past few months that we've seen, especially on fixed rate deals.

"If those fixed rate deals disappear then expect nervous borrowers to run for the hills.

"Although the Funding for Lending Scheme has started to show signs of working, it's not had the immediate impact everyone was expecting, so the jury's still out on whether it will be a game changer.

"And we need to see more activity at the higher loan to value level, rather than the concentration of deals focused on borrowers with large deposits.

"If lenders start becoming more interested in first time buyers again, then the CML prediction may well not be fantasy-land.

"This year is a critical one for the mortgage market after suffering a few years in the doldrums. The likelihood is that we will see improvement on last year, but nothing miraculous.

"The mortgage and property markets are in for a long, hard slog."

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