The number of mortgage approvals in the UK climbed to 818,500 in 2020, the largest number in one year since 2007, new Bank of England (BoE) data has revealed.

Last year’s figure was also an increase from the 789,100 mortgage approvals that the BoE reported for 2019.

The figures showed that December’s total of 103,400 mortgage approvals was a slight dip from 105,300 in November. However, the BoE suggested that strength in the second half of 2020 had offset significant weakness earlier in the year, when house purchase approvals slumped to a record low of 9,400 in May.

Approvals for remortgage, which only capture remortgaging with a different lender, fell slightly in December to 33,800, which was around 35% lower than in February (52,400). Across 2020, remortgage approvals fell to 451,400, following the 587,600 that the BoE recorded in 2019.

Hope Capital CEO, Jonathan Sealey, commented: “It feels appropriate that on the day Parliament gets to debate the stamp duty holiday, and merits of an extension, it’s revealed we had the largest number of mortgage approvals last year since 2007.

“All those connected to the property sector, not least the 138,000 people who signed the petition demanding an extension, will be listening with interest to the outcome of that debate later today. It’s clear that this upward trend that we’ve been witnessing for several months cannot continue if the stamp duty holiday literally ends overnight on March 31, with many transactions still awaiting completion.

“Some imaginative thinking is required by government and a focus from brokers on alternative ways of financing a property purchase, including the role specialist lenders can play, is needed now more than ever if anybody is still hoping to benefit from the saving.”

Just Mortgages and Spicerhaart national operations director, John Phillips, added: “No one would have predicted in March that we’d be talking about the best year since 2007 for mortgage approvals, but this is testament to the brilliant brokers and lenders who have weathered the storm.

“Despite predictions of a cliff edge, we foresee the market going from strength to strength in 2021. The end of the stamp duty holiday is set to be a speed bump, with the market slowing until we are past it, but it will quickly gather momentum again.”

The BoE’s latest figures also revealed that individuals borrowed an additional £5.6bn secured on their homes in December, a figure broadly unchanged from November, while effective interest rates on new mortgage borrowing rose to 1.90%, the highest since October 2019.

The data also indicated that households’ consumer credit remained weak in December, with net repayments of £1bn, following a net repayment of £1.5bn in November.

Total net repayments were £16.6bn in 2020, which the BoE revealed was the weakest total in one year on record. As a result, the annual growth rate fell further to -7.5% in December, a new series low since it began in 1994.

Phoebus Software sales and marketing director, Richard Pike, said: “The increased demand has pushed prices up and first-time-buyers are again feeling the brunt. With the average deposit needed now over £10,000 more than it was a year ago, according to research by Halifax, getting onto the property ladder is becoming harder again.

“The need for higher LTV lending is obvious although, for lenders, the ongoing economic impact and the risk of rising unemployment is a concern for long-term affordability.”

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