Net mortgage borrowing in March hit £11.8bn, Bank of England data details – the biggest number seen since the bank started tracking this data in April 1993.
This blows past the last record high, in October 2006, when an additional £10.4bn was borrowed against homes.
In the previous month recorded, February 2021, £6.4bn of additional borrowing was counted.
The BoE adds that gross lending reached a new high in March, too – £35.6bn in total.
The number of house purchase approvals came in at 82,700 in March, which is down on the 87,400 seen in February. The value of approvals for house purchases in March equated to £17.9bn versus £18.8bn in February.
Remortgage numbers ran closer to each other on a monthly basis – in March, there were 34,800 approved at a value of £6.7bn against 34,500 approved at a value of £6.6bn in February.
Further data shows that the interest rate paid on newly drawn mortgages rose by 4 basis points to 1.95% on a monthly basis. The lowest rate recorded by the bank is 1.72%, noted in August 2020.
Coreco managing director Andrew Montlake warns: “This mad March mortgage data highlights the frenzied rush of people to buy in the second half of last year and save thousands of pounds on stamp duty.
“But the celebrations surrounding the stamp duty holiday may soon ring hollow if the market cools off and people find their savings have been wiped out by the premium they have paid for property.
“When borrowing is as extreme as this, it never tends to end well.”
And London Money director Martin Stewart comments: “While the market remains very active, we are already starting to see the implications of the June stamp duty cliff edge. Yes, mortgages are being agreed in huge numbers but that doesn’t necessarily equate to completed sales. We are already seeing solicitors refusing to take work on where the buyer is expecting them to complete in time.
“It’s impossible to predict what will happen during the rest of the year in terms of demand for property. While we are hopeful that some normality will return to large parts of our lives, the issue of cheap money chasing too few assets still remains.”
Phoebus Software sales and marketing director Richard Pike, ponders: “We’re getting used to seeing these types of figures for mortgage approvals… how sustainable this is, when lenders are tied by strict affordability guidelines, is debatable.
“If the housing market is helping to drive the nations’ recovery in an unsustainable manner, will we be generating problems further down the track?
“Even with 95% mortgages available again the chances for many younger people, trying to get onto the property ladder, are becoming fewer as prices spiral upwards. At the moment it looks like we’re creating an unlevel playing field, especially for first-time buyers.”
Meanwhile, Hometrack managing director David Ross says: “Our data shows that £150bn of property transactions were completed in the first 15 weeks of 2021.
“Running ten weeks ahead of a typical year, this level of sales wouldn’t normally be achieved until the end of June. At the same time, one in every 50 homes was sold between 1st January and 15th April, up from one in every 100 homes during the same period last year.
“The return of high LTV mortgage products has opened up the market to smaller properties, which often rely on high LTV financing, while adding further demand that stimulates the supply chain.
“As the end of the full SDLT holiday approaches at the end of June, mortgage applications are expected to continue to rise. Lenders are anticipating a peak in mortgage market activity until this time, before tapering off in line with the traditional seasonal slowdown from July onwards and the arrival of the summer holidays. However, the emphasis is on ‘tapering’; we have no reason to expect a market cliff edge.”
