A total of 216,200 FTBs became homeowners in 2012, making this the first time the annual total exceeded 200,000 since 2007.

This was a year-on-year rise of 12% on 2011 when 193,000 loans were advanced.

Paul Smee, CML director general, said: “Despite the seasonal dip in lending that we normally see in December, the underlying trend for year-on-year increases in house purchase activity continued in 2012.

In the fourth quarter, FTBs also accounted for 42% of all house purchase lending, above the typical 38%, despite December being a quieter month for housing market activity among FTBs.

On a monthly basis, lending to first-time buyers, home movers and remortgage lending all eased in December, reflecting the usual seasonal factors.

According to the CML, the improvement in funding conditions, and in particular the Funding for Lending scheme (FLS) have stemmed the upwards pressure on interest rates seen through the first half of the year.

This is said to be particularly true for fixed rate loans, the rates on which peaked at 4.25% on average in August (coincidentally when FLS was launched) and have subsequently fallen to 3.84%.

Fixed rate loans were increasingly popular throughout 2012 – overall 69% of mortgages in 2012 were advanced on a fixed rate, up from 62% in 2011 and the largest proportion since 2007.

This preference for fixed monthly payments was prevalent among first-time buyers, 83% of whom opted for a fixed rate loan in 2012.

Smee added: “First-time buyers, in particular, have benefitted from the effects of better funding conditions and the Funding for Lending scheme, with the number of new people moving into home-ownership in 2012 reaching the highest level for five years.

“This, along with other factors, confirms that lenders really are open for business.”