2014 was the strongest year for mortgage lending since 2008 but there were signs of a sharp slowdown in the final three months.
Gross mortgage lending fell by 8% in the three months to 31 December 2014 compared to the previous quarter.
And the Q4 lending figure was just 1% higher than the same period in 2013.
The figures, published yesterday by the Council of Mortgage Lenders, estimate that gross mortgage lending reached £16.5 billion in December, unchanged month-on-month compared to November.
Overall, for 2014 the gross lending estimate was £205.6 billion, up a healthy 17% on £176 billion in 2013.
CML chief economist Bob Pannell said that housing market activity has been cooling in recent months but 2014 was still a strong year overall.
"First-time buyers were a key driver, helped by government initiatives such as Help to Buy. As a result, the number of first-time buyers topped the 300,000 mark.
"While a far cry from the half million that we might regard as 'normal', this was the highest number of first-time buyers since 2007."
Pannell said although the lending was "muted" in December, the pace of decline in approvals appears to have moderated.
"Alongside the big picture of a softer market, we are beginning to detect signs that underlying market conditions may be stabilising."
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "Although we expect the housing market to be more subdued over the next few months, we are still predicting lending in the region of £215 billion for the year.
"We expect the remortgaging market to be strong over the next 12 months with borrowers enticed by some of the astonishingly cheap deals now available.
"With 10-year fixes now available from just 2.94%, more and more borrowers will be tempted to commit for the longer term.
"The next step is for lenders to start easing criteria rather than cutting rates, a move we hope to see this year."
Brian Murphy, head of lending at Mortgage Advice Bureau (MAB), said the market was surprisingly robust given tighter lending criteria in 2014, which had the potential to dampen lending considerably.
He said consumer demand showed no sign of slowing in 2015, as borrowers made the most of cheap mortgages and changes to the stamp duty system.
Adrian Gill, director of Your Move and Reeds Rains estate agents, said: "Mortgage lending ebbed away in the final stages of 2014, after some ferocious tides of activity in certain areas of the property market last year.
"Many places across the country have witnessed a recent lull in house price growth, but the underlying sentiment in the market remains strong."
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