Mortgage lending doubles to £1.9bn

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Net lending, which strips out redemptions and repayments, was £1.9 billion during the month, up from November's depressed level of £834 million.

But the figure was still well down on lending levels in December 2007, when net lending totalled £7.72 billion.

The number of mortgages approved for house purchase also increased after hitting a new record low in November, with 31,000 loans in the pipeline - up from 27,000 during the previous month.

Although the number of mortgages approved for people moving home increased, the value of all loans approved fell to £8.72 billion, the lowest level since December 1999.

The fall was driven by a steep drop in the number of people remortgaging, with approvals for people switching to a new deal declining to 36,000, compared with 41,000 in November and a recent six month average of 66,000.

The figures are in line with those reported by the British Bankers' Association earlier this week, which showed a 27% jump in the number of mortgages approved for house purchase, although this was also off a record low base.

The group cautioned against reading too much into the figures, saying the increase was likely to reflect delayed activity from November, when interest rates were cut by 1.5%.

Vicky Redwood, UK economist at Capital Economics, said: "December's rise in mortgage approvals might be a sign that the rise in new buyer interest seen over the past few months is finally boosting housing market activity.

"But we wouldn't get too excited. For a start, the rise from 27,000 to 31,000 simply reversed November's drop - approvals are still 76% down on their peak. Meanwhile, we find it hard to see approvals picking up significantly further when credit is still so hard to get."