According to figures from the Bank of England’s Money and Credit analysis, this was up on February last year which saw £23.1bn of gross lending.
This was close to the recent high in March 2016, just before the introduction of the three per cent stamp duty surcharge on additional homes, then gross lending reached £27.9bn and was the highest mark since 2008.
However, fewer mortgages were approved during February as activity waned with people realising they would not meet the original stamp duty holiday which was set to end in March. Some 135,035 mortgages were granted in February compared to 143,148 in January.
Of these, 87,669 were for house purchases and this was down from 97,350 in January. This was also a decline from a peak of 103,700 in November. Compared to the same month last year, this was an increase from 73,500.
Meanwhile, 34,292 remortgages were approved compared to 32,643 in January.
Reflecting this trend, the value of mortgages approved also dipped during the month. In February, the value of approved mortgages amounted to £26.2bn, a steady fall from the £28.3bn in January and £29.2bn in December.
Net mortgage borrowing reached £6.2bn in February, which was also the strongest level of borrowing since March 2016.
Sign of what’s to come
Ben Taylor, CEO of real estate agency Keller Williams UK, said: “It’s becoming quite clear how impactful the current stamp duty holiday has been in driving homebuyer demand and even the mere sight of the original deadline appearing on the horizon was enough to substantially reduce mortgage approval levels.
“That said, the market was far from teetering on the supposed cliff edge that the deadline was due to bring and homebuyers continued to flood the market with confidence.”
“Not since before the 2008 financial crisis have we seen such abundant levels of monthly mortgage lending and this bodes very well for the year ahead,” Taylor added.
Matthew Cooper, founder and managing director of Yes Homebuyers, said: “Today’s mortgage approval figures provide a brief look at what faces the market when the stamp duty holiday does finally expire.
“The substantial drop in approvals seen during February will no doubt reverse due to the boost of a stamp duty holiday extension announced in the March Budget.”
Cooper added: “However, it’s now clear that when it does finally come to an end, buyer demand is going to plummet. When it does, the rate of house price growth won’t be far behind and so those thinking of selling are best to do so now before this dip in property values hits.”