The figure is significantly higher than the Council of Mortgage Lenders’ £143bn and comes close to the lender trade body’s predictions for 2013.

The FSA compiles its data from Mortgage Lending Administration Returns (MLAR) provided by regulated firms. It said: “We collect data from the whole of the regulated mortgage market, including any second charge lending that regulated lenders conduct. The CML gathers data from its members.”

The CML uses lending figures provided by a sample of lenders that represent around 95% of the mortgage market, which are then scaled up to represent the whole market.

A fall in the rate for fixed-rate lending drove overall interest rates down from 3.89% in Q3 to 3.81% in Q4.

Advances in the quarter fell by 0.5% on the previous quarter to £39bn. However, new commitments reached £37bn – an increase of 3% on the previous quarter.

Coreco director Andrew Montlake said anecdotally there was a lot more of a positive vibe as 2012 neared its end: “It turned out to be better than suspected. The start of the year was good, it then turned down dramatically but thanks to Funding for Lending and more positive talk it actually finished better than feared.”

Ash-Ridge Asset Management mortgage consultant Jane King said a boost to consumer confidence rather than the fall in interest rates would have the more impact on lending volumes: “It is the on-going problems with people trying to get deposits together, tightened lending criteria and in some places supply.

“It doesn’t matter how low the interest rate is – if buyers are nervous about the market, they won’t buy.”

Lending for house purchase accounted for two-thirds of new advances in the final quarter. The proportion of advances for remortgages rose to 28%.

Mortgages with a loan-to-value of more than 90% represented just over 2% of new lending, and the proportion of lending to borrowers with a credit-impaired history remained below 0.3%.