House purchase mortgage approvals fell in 2016 but the value of loans increased, figures suggest.

Data from the British Bankers’ Association for December show banks approved 43,228 mortgages last month, up from 41,003 in November but 4.1% down for the whole of 2016.

Meanwhile, estimates on gross mortgage borrowing by the Council of Mortgage Lenders claimed home loan borrowing reached £20.4 billion in December, 4% lower month-on-month but taking the total amount lent in 2016 to a post 2008 high of £246 billion.

Mohammad Jamei, CML economist, said: “The UK housing market, much like the wider UK economy, ended 2016 on a generally positive note.

“Approvals for house purchase have recovered strongly of late, and this should feed through to lending figures in the early months of 2017.

“The current availability of mortgage credit is benign, and the real issue continues to be a dearth of properties on the market, which adds to the challenges facing would-be buyers.

“Uncertainty associated with political factors and prospective changes to the tax treatment of landlords will weigh on prospects for the year ahead.”

Commenting on the figures, Paul Smith, chief executive of haart estate agents, said: “The surge of housing purchase approvals seen in December suggests the New Year should be off to a flying start, so long as the industry does not get run off track by being bogged down with the ins and outs of Brexit negotiations.

“The upcoming housing white paper has the potential to uplift this – however, the bungling over its release date does not inspire much confidence that we’re on the cusp of a home ownership revolution.

“The Government needs to start listening to the voices within the property industry if we are to avoid leaving a generation of aspiring home owners behind by inaction and policy failures.

“It is crucial that we see greater government incentives for house builders to build the right type of housing, and for older people to downsize their family homes. Only then will we see the level of fluidity in the market needed to combat a growing population and a lack of supply.”