Despite a slowdown in December where gross mortgage borrowing reached £10bn, 12 per cent lower than the same month in 2013, borrowing from banks was higher overall in 2014.

According to the BBA’s high street banking statistics, gross mortgage borrowing was £130bn in 2014 compared with the previous year, while overall mortgage stock is 1.5 per cent higher than a year ago.

Richard Woolhouse, chief economist at the BBA, said: “The mortgage market has been softening since the spring, but for customers taking out home loans right now there are some great deals and we expect the market to begin to grow again this year.”

Following temporary gridlock in approval numbers linked to the implementation of the Mortgage Market Review in early 2014, figures slowed throughout the rest of the year. However, house purchase approvals reached 499,500 in 2014, surpassing 459,000 in 2013.

The BBA pointed out that although figures have improved since 2012, the most recent numbers are some 50 per cent below the peak seen in 2002.

In December, house purchase approvals were 24 per cent lower than the previous month, with remortgaging down 20 per cent and equity withdrawal down 32 per cent.

Overall, remortgaging numbers in 2014 were 6 per cent lower than in 2013 and the number of loans approved for equity withdrawal dropped to its lowest annual total yet at 81,000.

Adrian Gill, director of Your Move and Reeds Rains estate agents said: “The mortgage market went out with more of a whimper than a bang at the end of 2014. But the market has a mental ‘reset’ mechanism at Christmas, and December is a poor predictor of activity over the coming months so we can’t read too much into this.

“Lending may have eased back from the full throttle of the summer, as borrowers negotiate new regulatory hurdles, yet vast distance has been covered over the year as a whole – with overall approvals up 9 per cent on 2013.”

Gill added that buyer confidence off the back of Stamp Duty reform and record-low interest rates was an indication that the mortgage market would “click back into gear”.

“Taking a more sweeping view, borrowing is still dwindling behind pre-recession levels, and in many parts of the country, house price growth has braked but all the elements are in place to support further strong growth this year,” he said.