The housing market is still in a deep slump
The number of new mortgages for house buyers approved by the UK's banks fell last year by 52%.
The British Bankers Association (BBA) said the number of these approvals went up from 17,000 in November to 22,000 last month.
However, this was still 47% down on December 2007.
The BBA said the December rise did not suggest a real recovery in lending and was "more likely to reflect delayed activity from November".
"The banks approved less than half the 2007 number of loans for house purchase, reflecting falling demand from households facing greater economic uncertainty and double-digit falls in house prices over the year, which led to a wait-and-see mentality," said David Dooks of the BBA.
The figures show that people were becoming more cautious about their borrowing and spending as 2008 came to an end.
The amount of money outstanding on credit cards dropped by £218m in December.
And bank customers continued to pay off more of their overdrafts and personal loans than they took on. Total outstanding borrowing dropped by another £135m, the fifth monthly fall in a row.
"Consumer credit was very weak in December as people reined in their credit card spending, despite early sales and heavy discounting by retailers," said Mr Dooks.
"This consumer caution was also reflected in personal deposits, which rose strongly," he added.
Despite rapidly falling interest rates, prices and sales appear still to be falling as the credit crunch continues to choke off the supply of mortgage funds, and lenders ration their available cash to only the most creditworthy of customers.
The property website Hometrack said that house prices in England and Wales continued to fall this month, for the sixteenth month in a row.
This was accompanied with another fall in the number of sales going through.
Another property website, Globrix, reported that the number of sellers cutting their asking price had jumped this month.
The number of price cuts more than doubled in the first three weeks of January compared with December.
More than 14,000 people did this, with the average reduction being just over £21,000.