Monthly mortgage lending highest since December 2007

(Getty Images)

Lenders handed out £17 billion to would-be buyers and remortgaging homeowners last month but business credit is still shrinking, according new figures released today.

The Council of Mortgage Lenders said December’s gross mortgage lending — taking no account of repayments — was a stunning 49 per cent higher than a year earlier, making it the highest total for a December since 2007.

In 2013, banks and building societies lent £177 billion, up from £143 billion the previous year.

CML chief economist Bob Pannell said: "Short-term growth prospects for the housing market and the wider economy look very positive."

But the mortgage buoyancy was not matched by business lending, according to the Bank of England’s latest Trends in Lending report.

Credit to business shrank by £3.7 billion in November — a far bigger decline than the previous month. In the 12 months to November, the picture improved slightly, with business loans shrinking by £3 billion compared with £3.7 billion the year before.

Lenders expect demand to pick up “significantly” in the months ahead, the Bank said.