With the rush to beat stamp duty deadline, lending was returned to the peak levels seen before the financial crash of 2008.
According to the British Bankers Association, gross mortgage borrowing was £17.1 billion in March, 64% higher than a year ago.
With a 3% hike in stamp duty investors rushed to close property deals for buy-to-let and second homes that began in April.
Re mortgaging also was on the increase as homeowners continue to take advantage of low interest rate mortgages. This has led to the average mortgage loan taken out reached a record high, hitting £184,200. The previous high was £158,000 at the peak of the previous lending cycle in April 2008.
Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “The fact that mortgage borrowing has increased year-on-year yet again is likely to be the result of falling mortgage rates across the market. For example, the average two-year fixed mortgage rate has decreased from 2.97% to 2.55% in just 12 months, while the average five-year fixed rate has dropped from 3.53% to 3.19% over the same period.
Some of the highlights of the figures released include
- Banks approved 45,096 mortgages in March
- Mortgage approvals in March was 20% higher than a year ago
- Remortgaging up 25% from last year
- House purchases up 14% from last year
- Unsecured borrowing by households is growing at around 6% per annum