Net mortgage borrowing increased to its highest monthly level in five years during February, with individuals borrowing an additional £6.2bn secured on their homes, new Bank of England (BoE) figures have revealed.

The Bank suggested this was supported by the expected ending of the temporary stamp duty holiday at the end of March, which has now been extended to the end of June.

The total for February was the strongest net mortgage borrowing since March 2016 (£7.2bn), when borrowing was also boosted by changes in stamp duty.

According to the BoE’s latest Money and Credit statistical release for February, this strength in mortgage borrowing followed a large number of approvals for house purchase.

February saw 87,700 approvals, which while down from a peak of 103,700 in November 2020, was well above the monthly average in the six months to February 2020 (67,300). The figures also showed that approvals for remortgage – which just capture remortgaging with a different lender – rose slightly to 34,300 from 32,600 in January 2021.

CEO of specialist short-term lender Hope Capital, Jonathan Sealey, suggested the figures show that the housing market has “weathered the storm” of the past 12 months.

“Having just gone into lockdown in March 2020, it was hard to know what was going to happen to the property market as things like viewings or even visiting an estate agent became effectively banned,” Sealey said.

“But today, as the first set of lockdown restrictions start to lift in England and Wales, we can see that the housing market – driven to a large extent by the stamp duty holiday – has not only bounced back but continues to grow.

“All those involved in the sector should take credit for that, and initiatives such as virtual viewings and the introduction of new products during the lockdown, have contributed to the property market staying operational.”

Just Mortgages and Spicerhaart national operations director, John Phillips, said: “The housing market is an impressive juggernaut that continues to march forward. While mortgage approvals are down slightly from the peak in November 2020, they are still higher than anyone expected.

“With the extension to the stamp duty holiday, the reintroduction of 95% LTV mortgages and the furlough scheme running till September, the property market should keep moving at a pace and we may see records broken for the first quarter of 2021.”

The BoE’s latest figures also revealed that individuals continued making net repayments of £1.2bn in consumer credit in February, which was a slightly smaller net repayment than the average of £1.8bn since March 2020. As a result of the further repayment, the annual growth rate fell to -9.9%, a new series low since it began in 1994.

Within consumer credit, the weakness on the month reflected net repayments on credit cards (£0.9bn) with some repayments of other forms of consumer credit (£0.3bn).

Hargreaves Lansdown personal finance analyst, Sarah Coles, added: “Lockdown in February was just too miserable for us to sit tight and count our savings, so we loosened the purse strings a bit and invested in a few lockdown pick-me-ups.

“We repaid slightly less debt than in January and saved slightly less too. As the lockdown wore on through another cold and dark month, we decided to put our cash to good use and cheer ourselves – and our homes – up a bit instead. Retail sales figures from last week show we poured a small fortune into DIY and garden purchases.

“However, we didn’t go overboard. Savings still continued to build and we paid off large chunks of debt too. Consumer borrowing is down a record amount in a year – at almost 10%.”

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