Net borrowing during the month was £11.8 billion which is higher even then the peak in October 2006, which was £10.4 billion.

The extension of the stamp duty holiday was attributed to the record-breaking figures with the BoE also revealing how gross lending also reached a series high in March of £35.6 billion.

Along with strong borrowing came a large number of approvals too. Indeed, the BoE reported numbers were at 82,700 in March.

Although this was lower than the 103,100 recorded in November 2020, the BoE described these figures as ‘relatively strong’ and also topped the 73,000 approvals in February.

Approvals for remortgage – which only took into account those with a different lender – were largely unchanged at 34,800.

The BoE also reported the ‘effective’ rate – the actual interest rate paid – on newly drawn mortgages increased by four basis points to 1.95% in March.

This, it explained, was above the rate in January 2020 (1.85%), and compared to a series low of 1.72% in August 2020. The rate on the outstanding stock of mortgages remained broadly unchanged at a series low of 2.08%, it said.

‘Alarm bells’

Laith Khalaf, financial analyst at AJ Bell, took a cautious approach to the record borrowing figures.

He said: “Alarm bells should be ringing that the previous peak in borrowing was in October 2006, just before the wheels were about to come off the global economy, because consumers, businesses, and the banking sector were drowning in unsustainable debt.

“However, there are some reasons you might believe this time really is different.

“Banks are now much better capitalised, and much stricter in terms of their lending activity, with higher deposits taken on mortgages. This doesn’t prevent a downturn in the housing market, but it reduces the chance of a catastrophic systemic meltdown if property prices falter.

“Interest rates are also extremely low, making debt more affordable for homeowners. The average interest rate paid by mortgage borrowers is now just 2.1%.

Impact of job losses

Nitesh Patel, strategic economist at Yorkshire Building Society, said: The housing market had benefited from the fact home purchasers were typically from higher income groups.

“But jobs losses,” he said, “have mostly been concentrated in the lower-paid occupations such as in the hospitality sector, which has been hit with a cruel blow by Covid-19.

“We expect lending to remain strong in the coming months, as demand remains at an elevated level driven by the current tax cut, low borrowing costs and buyers amassing large savings pots during lockdown.”