Gross advances reached £51.3bn in quarter four, 0.2% lower than the total reached in the fourth quarter of 2013.
The Mortgage Advice Bureau's head of lending Brian Murphy labelled activity in quarter four as "sluggish", although he said "the market is geared towards greater activity in 2015".
He added: “The average interest rate on total amounts outstanding has fallen to its lowest point in over seven years, and consumers continue to be the winners of the mortgage price war.
“In a low rate environment – and with a base rate rise pushed further back on the horizon – borrowers are increasingly willing to take on variable rates, with the proportion of advances at fixed rates falling for the first time in over two years.
“Mortgage affordability is certainly swinging in consumers’ favour.”
But the proportion of advances exceeding 90% LTV decreased by 0.05% in quarter four, as Murphy reckoned "for those with small deposits, there is definite room for improvement".
He said: “While the Help to Buy scheme has helped to prop up higher LTV lending, it continues to be underrepresented in the market.
“More lenders need to expand this area of lending to ensure the housing ladder is not out of reach for lower income first-time buyers.”
Buy-to-let lending continues to perform strongly, as lending stood at £7.6bn in the fourth quarter, up from £6.6bn in the fourth quarter of 2013.
Adrian Gill, director of Your Move and Reeds Rains estate agents, said: “Front-end demand is beginning to blossom in 2015, as consumer confidence grows.
“Slashed Stamp Duty fees and more gradual house price growth are bringing homeownership closer within reach of aspiring buyers, while at the same time rock bottom inflation and competitive mortgage deals are giving borrowers a boost.
“Buyers are finding brilliant deals on homes, and this front-end sales activity will soon trickle down to completions, feeding the property recovery.”
