Gross mortgage lending rose to an estimated £26.5bn in January, up 11% from £23.9bn in December 2007, according to the Council of Mortgage Lenders (CML).

Typically, lending is lower in January than in December. Gross mortgage volumes are expected to be lower in the coming months following a fall in mortgage approvals towards the end of last year.

Michael Coogan, CML director general, said: “Gross lending held up well in January. However, there is considerable uncertainty in the housing market at the moment and we expect lending volumes to be lower in the coming months.

“It is likely that demand will be stronger for remortgages than for house purchases in the short term. Home buyers might be more inclined to transact if their moving costs were reduced and the Government has the opportunity to address this by raising stamp duty thresholds and cutting the rates of stamp duty in next month’s Budget.”