There has been an "encouraging upturn" in mortgage lending in the second half of the year, according to specialist lender Bradford & Bingley.
Mortgage development manager Duncan Pownall said figures from the Council of Mortgage Lenders showed that lending had risen to £28.5 billion, the second highest monthly figure on record.
"Looking forward to the New Year, the picture is encouragingly healthy," he said.
"The main fundamentals that underpin borrowing activity are expected to remain stable. Affordability remains high and we foresee a quarter point cut in base rate in the first half of 2006, bolstering the mortgage market further.
"We also predict sustainable growth in house prices of between two and three per cent over next year."
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