Gross mortgage lending is at its highest level since 2008, according to figures from the Council of Mortgage Lenders (CML).
The CML estimated that gross mortgage lending reached £19.9bn in December – 23% higher than December 2014, when it was £16.2bn.
There are 11.1m mortgages in the UK, with loans worth more than £1.3 trillion.
The CML, whose members are banks, building societies and other lenders who make up around 95% of all UK residential mortgage lending, said estimated total for the year was £220.3bn.
This was an 8% increase on 2014’s £203.3bn and the highest annual gross lending figure since 2008.
December’s £19.9bn figure was 3% lower than November’s figure of £20.5bn, but 23% higher than December 2014.
Gross mortgage lending for the fourth quarter of 2015 was an estimated £62.3bn – a 1% increase on the third quarter and a 23% increase on the fourth quarter of 2014.
CML economist Mohammad Jamei said: “Lending ended the year stronger than it started, with our estimate of nearly £20bn lent in December.
“This brings total lending to just over £220bn for 2015 as a whole, and slightly higher than we had anticipated.
“The low inflation environment, along with real wage growth, an improving labour market and competitive mortgage deals have all helped to underpin demand.”
But he said there remains uncertainty in the near future, with the number of existing and new properties on the market still in short supply.
“There is an added element of uncertainty as we wait to see the impact of tax changes on the buy-to-let sector.”
In a speech in January, the Governor of the Bank of England, Mark Carney, ruled out an immediate rise in interest rates and said any future increases would be small and gradual.
Six months earlier he had suggested that rates could rise around now, but in a speech at Queen Mary University of London, he said the world was “weaker” and UK growth had slowed, making now not the time to raise interest rates.
The decision is good news for mortgage holders, but less welcome for savers who have been hit by low interest rates since the financial crisis.