In a snippet of news likely to further intensify debate between economic optimists and pessimists, the number of new mortgages approved for home buyers picked up slightly in December, according to the Bank of England.

There were 31,000 mortgage approvals, up from 27,000 in November. However, this is still the second lowest figure on record. At the same time, HM Revenue & Customs said that property sales were picking up.

To contrast the positive figures, lending and industry experts have warned that banks are still short of money and mortgage lending is still likely to decline.

Over the whole of 2008, lending slumped by 58%, with just 519,000 home loans approved, compared with 1,250,000 in 2007.

HMRC said completed property sales across the UK, for those worth £40,000 or more, rose in December to 61,000 from 52,000 in November.

And the HMRC figures showed that sales for the whole of last year, at 930,000, were 43% down on 2007.

In the past few weeks some commentators have suggested that activity, if not prices, in the housing market might be about to pick up. Indeed, the level of completed home sales recorded by HMRC in December was the highest for five months.

Also, the slashing of interest rates in the past few months by the Bank of England has meant that mortgages are much cheaper to repay, though new borrowers still have to raise the sizeable deposits needed to obtain a home loan.

The Royal Institution of Chartered Surveyors’ (Rics) chief economist has suggested mortgage approvals might rise again in the next few months. However, he also suggested people should be wary of being too optimistic.

It is easy to see what he means. The rise in approvals from 27,000 to 31,000 in December only reversed November’s drop. This means that approvals are still 76% down on their peak. At the same time, it is hard to see approvals picking up significantly further while credit is still so hard to get.