Mortgage lending in November reached its highest level since July 2004, the second strongest figure on record, according to lenders today.

The Council of Mortgage Lenders (CML) said that gross mortgage lending rose by 5% to reach an estimated £28.5bn last month, just 1% lower than the £28.9bn lent in July 2004 and 30% higher than last November's figure of £21.76bn.

The CML said that these figures suggested a "robust underlying picture" due to the fact that lending activity is generally slow at the end of the year.

These figures, the group said, provided further evidence of a housing market recovery during the past year, supported by high levels of remortgaging as fixed rate loans matured and people looked for a new deal.

"The housing and mortgage markets have clearly strengthened significantly from the lows of a year ago," said Michael Coogan, the CML's director-general.

"There have been upward trends in gross mortgage lending and approvals, and more stable house prices in recent months."

But Mr Coogan was cautious in his predictions for future housing market activity.

"While it could be tempting to assume this strengthening will continue, our expectation for the coming year is of relatively subdued transactions levels, mortgage lending moderating a little from recent levels, and house prices rising by about 2%," he said.

British Bankers' Association (BBA) figures, released today, also showed that mortgage lending in November rose at its fastest pace since July 2004.

Net mortgage lending rose by an underlying £5.1bn, compared with the rise of £4.3bn in October and the previous six months' average of £4.4bn.

But unsecured personal lending rose by just £0.3bn: a weaker increase than in October and the previous six months, the BBA said.

Of this, loans and overdrafts rose by £0.1bn, well below the recent average of £0.4bn, while credit card borrowing also rose by £0.1bn.

David Dooks, the BBA's director of statistics, agreed that November's above-average rise in mortgage lending reflected steady demand in the property market, but pointed to other lending figures which painted a far weaker picture.

"Ahead of the festive season, the picture of consumer spending and credit is mixed," he said. "The pick-up in retail sales is not yet being matched by stronger borrowing on credit cards or higher demand for personal loans."