Gross mortgage advances were also slightly higher, edging up by about pounds 80m to pounds 4.79bn on the month and compared with a pounds 4.7bn average for the quarter and a pounds 4.4bn average in the previous six months.
Measured on a net basis, some pounds 5.49bn of loans were advanced during the final quarter of last year, the highest quarterly total since the first quarter of 1992.
Loans approved fell back to pounds 4.3bn from pounds 4.73bn but were higher on average during the final quarter of last year than earlier in 1993, Bank figures showed.
However, the number of loans approved also declined - 80,000 in December, 10,000 less than in November and the lowest number in any month since May.
Adrian Coles, of the Council of Mortgage Lenders, said: 'The interest which has been shown in house-buying is actually feeding through to sales.'
He added: 'As negative equity recedes and more households begin to move again, levels of lending are likely to increase.'
But Mr Coles warned that any renewed confidence in the housing market was fragile. With tax increases looming this April, he stressed the importance of interest rates staying low.
The Bank of England confirmed provisional figures showing that narrow money M0 grew by 5.3 per cent in the year to January after a modest 0.3 per cent expansion during the month. That compares with an annual growth rate of 5.8 per cent in December.Reuse content