There were 127,000 mortgage payment deferrals in place in mid-November, UK Finance data shows.

This compares to the peak of 1.8 million seen in June and is a further reduction from the 162,000 recorded in October.

It adds that an estimated 89 per cent of customers whose payment holidays have come to an end are now making repayments.

UK Finance managing director personal finance Eric Leenders comments: “It will always be in the long-term interest of borrowers who are able to do so to resume making payments, but for anyone who is still struggling ongoing tailored support will be available.”

The data also shows that, by September, house purchase lending had almost recovered completely from the 70 per cent drop in demand seen in April.

UK Finance warns, however, it should not be assumed that the “ballpark” 130,000 purchases loans that didn’t take place between April and September that might otherwise would have in normal times, will do so now.

In fact, despite the strong Q3 rebound, total house purchases in the first nine months of 2020 are nearly a quarter lower than in the same period for 2019.

It has been “a strong and rapid return to trend – albeit a broadly flat one,” UK Finance concludes.

Forensic Property Finance managing director Jonathan Harris says: “The surge in property transactions is potentially hiding a multitude of sins with some homeowners struggling with their mortgages thanks to losing their jobs.

“Next year is an unknown quantity with the furlough scheme and stamp duty holiday scheduled to come to an end – government support will have to continue for quite a while longer if potential economic disaster is to be averted.”

And MT Finance director Tomer Aboody adds: “The market performed strongly in the third quarter, which is no surprise considering lenders’ liquidity and support from the government… how this will potentially all change come March is a concern and the government needs to be cautious so as not to allow the confidence in the market to dissipate, as the furlough scheme ends at the same time as the stamp duty break.

“Research has shown that the stamp duty saving has probably been paid for via an increase in property values. But with mortgage rates at all-time lows, homebuyers are taking on affordable debt and therefore the higher values are managed within the mortgage payments.

“The halt to evictions might also come to an end soon, which could result in many repossessions along with job losses, leaving the economy in a desperate state.

“The government can only keep watering the money tree for so long before the water runs out and reality hits. Low unsecured levels of debt shows that people are being cautious about an anticipated downturn in the economy, and so hopefully mitigating the numbers and size of the recession.”