The number of mortgage approvals made to home buyers fell to a 20-month low in December but banks predict that activity will pick up again in the coming months.

Some 35,667 home loans with a collective value of £5.8 billion were approved for house purchase last month, marking a 24% decrease compared with December 2013 and the lowest monthly total since April 2013, according to British Bankers' Association (BBA) figures.

But across the whole of 2014, 499,000 house purchase approvals were recorded, which is a 9% increase on 2013. Last year's total is still 50% below the peak recorded in 2002.

Meanwhile, annual growth in non-mortgage borrowing is continuing to run at its highest rate for six years, the BBA reported.

It said that many people are starting to feel more secure about their job and personal situation generally, which is helping to encourage more big ticket purchases such as a new car or a home improvement project.

Some 268 million credit card purchases with a collective value of £14.2 billion were made in December, marking an 11% increase on the number of purchases made on plastic in December 2013.

Across 2014, 2.5 billion credit card purchases worth £145 billion were made, which is 8% more than in 2013.

Meanwhile, people saved 57% more into their Isas last year than they did in 2013, with £13.1 billion placed in the tax-free accounts in 2014. New rules introduced last July gave people a more generous and a more flexible Isa allowance.

Housing market activity got off to a strong start in early 2014, but the market started to cool as lenders adjusted to stricter mortgage lending rules which came into force in April and home buyers showed signs of growing more cautious.

But some experts have predicted that the market could get an added boost in early 2015 following the Government's announcement in December of a complete overhaul of stamp duty, making the tax cheaper for the majority of home buyers who are liable to pay it. Meanwhile, lenders are currently offering some of their lowest ever mortgage rates.

Richard Woolhouse, chief economist at the BBA, said: "The mortgage market has been softening since the spring, but for customers taking out home loans right now there are some great deals and we expect the market to begin to grow again this year.

"Robust employment data is making many of us feel more secure in our jobs and optimistic about our futures. That's now feeding through to personal lending and credit card data, suggesting people are happy to finally replace the car or spend on household improvements."

The BBA's figures also show that borrowing by non-financial companies contracted by £15.7 billion in 2014, compared with a decline of £11.6 billion in 2013.

Mr Woolhouse said: "Outstanding business lending has been falling as larger firms have used the bond market rather than borrowing from banks.

"Despite this, outside real estate businesses are generally expanding their lending."

The BBA said that 2014 has seen positive borrowing growth in the manufacturing, wholesale and retail sectors.