The value of new mortgage commitments was up 24.2% in the last quarter of 2020 compared to a year earlier, according to the Bank of England. At £87.7bn, this was the highest level since 2007.

Gross mortgage lending was also up to £76.6 billion, 4.2% higher than the same period in 2019.

Iain McKenzie, CEO of The Guild of Property Professionals, said: “At a time of a global pandemic, it’s incredible to think that residential mortgage commitments are at the highest level since the third quarter of 2007.

“What an amazing display of consumer confidence in property, and a complete success for the incentives offered by the government. It is good news for the wider economy that there is so much interest in getting on the property ladder, despite the financial challenges faced by many.

“Extending the stamp duty holiday until the end of June and phasing out the scheme until September should help defend against any possible downturn in the market.”

Paul Stockwell, chief commercial officer at Gatehouse Bank, added: “The value of new mortgage commitments has hit a 14-year high, propelled largely by homeowners who aspired to move to bigger properties while under lockdown restrictions, and who quickly capitalised on the stamp duty incentive when it was announced last summer.

“Their activity meant the annual growth rate for these new mortgage commitments nearly quadrupled in the final quarter of 2020.

“The stamp duty extension announced in the Budget last week will help to ensure many of these mortgage agreements carry through to completion and gross mortgage advances in the first three months 2021 are likely to be strong.”

90% mortgage slowdown

The share of mortgages advanced in quarter four of last year, with a loan to value of over 90%, was only 1.2%, 4.5 percentage points lower than a year earlier, said the Bank of England.

This is the lowest level since these statistics began in 2007 and is unsurprising given the reduction in availability of these mortgages during the pandemic.