By Marcus Leach

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

This represents a 12% drop from £13.2 billion in November but a 12% rise from December 2010 (£10.5 billion). December was the fifth month in a row of higher year-on-year lending.

Lending totalled an estimated £37.3 billion in the fourth quarter of last year, down from £39.2 billion in the previous quarter but 11% higher than the last three months of 2010 (£33.6 billion).

For 2011 as a whole, estimated lending totalled £140 billion, slightly above our annual forecast of £138 billion. This is up 3% from £136 billion in 2010.

"The closing months of 2011 saw stronger mortgage lending activity and housing transactions, despite the fact that short term economic prospects are challenging," CML chief economist Bob Pannell said.

"There is a glimmer of light ahead for households in that real incomes could stabilise and perhaps even start rising by the end of the year. But, continuing Eurozone problems mean that mortgage funding prospects are uncertain, so overall UK mortgage market conditions for the year ahead remain difficult to call."

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