However, this represents a decline of 8% when compared to Q3 2011.
The average interest rate on new advances continued to fall during the quarter, down from 3.59% to 3.49%, a new low for the series.
The FSA says this was down to a fall in the rate for fixed rate lending more than offsetting a small increase in variable rates.
New commitments totaled £37bn Q4 2011, 11% lower than in the previous quarter but up 7% year-on-year.
Lending for house purchase accounted for 61% of new advances, up on Q3, and 58% of commitments, a small decrease from the previous quarter.
The proportion of new lending done at an LTV of more than 90% continued to be below 2% in Q4, as it was throughout 2011, while new lending with a combination of high LTV and high income multiples rose slightly to account for just over 1% of new lending.
The proportion of loans to borrowers with an impaired credit history remained at 0.4% for the third successive quarter. It has been below 1% since the end of 2008.
In Q4 there were 34,600 new arrears cases which was down 1% on the previous quarter and 14% lower than in Q4 2010.
Consequently, the total number of accounts in arrears at the end of the quarter also fell and, at 313,200, was 3% down on Q3 and 9% below Q4 2010.
The proportion of the residential loan book that is in arrears also continued on a downward trend, from 2.72% in Q3 2011 to 2.61% in Q4.
The number of new possessions in the quarter fell by 9% to 8,827, and arrears totaling £36m on 9,815 accounts were capitalised.