Mortgage lending to house buyers rose slightly in 2010, according to the Council of Mortgage Lenders (CML).
There were 529,300 new loans made to house buyers last year, up 3% from 2009, with their value rising 11% to £77.1bn.
The CML said lending was now "stable but subdued", although it was still at "historically low levels".
It also warned that many borrowers were still locked out of the property market by a shortage of mortgage funds.
"2010 was about the mortgage market continuing to adapt to the post-credit crunch environment, and the full year data shows that the lending industry is now on a more stable footing but at historically low levels of activity," said Michael Coogan, director general of the CML.
"However, [the market] is still not serving all customer groups that may want to borrow, in particular those without a significant deposit."
At the very end of 2010 mortgage lending dipped.
Only 39,900 loans were granted to house buyers in December, 4% fewer than in November 2010 and 37% down from December 2009.
However, the CML said the drop had been distorted by a rush at the end of 2009 to beat the reintroduction of higher stamp duty.
The continued rationing of mortgage lending has made it especially hard for first-time buyers to obtain a loan.
In 2010, only 195,000 loans were made to first-timers; the second lowest annual figure since records began in 1974.
Low interest rates meant that they typically paid just 13.3% of their income in mortgage interest payments.
But the stringent requirements of lenders meant they had to find a deposit averaging 23% of the value of their prospective homes.
That was the second largest percentage on record, behind 2009's figure of 25%.
The lack of funds available to lenders is the main reason for mortgage rationing.
However, fears of further falls in house prices are a contributory factor to the high deposits demanded by mortgage lenders.
Recent surveys from lenders such as the Halifax and the Nationwide have shown that prices have been sliding recently.
On Thursday, the CML reiterated its prediction that home repossessions were likely to rise this year, especially if interest rates and unemployment go up.