Borrowers secured an additional £6.2bn in mortgage borrowing last month which is the highest level since March 2016, according to the latest data from the Bank of England.

Mortgage approvals were up 38% on the long-term average, as demand from buyers continues to grow, the figures show.

Approvals fell marginally compared with January but are expected to increase sharply following the extension of the stamp duty tax holiday and the introduction of the new 95% loan-to-value mortgage guarantee; good news for agents.

A total of 87,700 mortgages for new house purchases were approved in February, compared to an average of 63,500 over the past 10 years.

This represented a drop compared to the peak of 103,700 approvals in November 2020, and also a 10% fall compared to the 97,400 approved in January 2021.

But the data was recorded at a time when purchasers believed they were unlikely to benefit from the government’s stamp duty holiday, which could save them up to £15,000 on their property acquisition.

As many of you will already know, the holiday will continue in its existing form until the end of June, and then with a lower nil rate band of £250,000 until the end of September which is likely to mean mortgage approvals increase over the next few month, as buyers rush to secure new property deals.

Jeremy Leaf, north London estate agent, commented: “The dip in approvals occurred as many thought that benefiting from the stamp duty concession would be impossible in view of the backlog.

“However, since the deadline was extended and vaccination rollout has taken off, the market has gained new impetus and more balance as sellers in particular are not as fearful of welcoming visitors to their homes.”

In response to the Bank of England’s latest Money and Credit Report, David Ross, managing director, Hometrack, commented: “The latest figures from the Bank of England show us that the mortgage market continues to ride high on the back of strong applicant demand, driven by the stamp duty holiday and the consumer reengagement following the initial lockdown and market closure of 2020.

“While we can see a seasonal dip in mortgage applications, we remain optimistic that interest for mortgages still remains strong, in light of the 95% mortgage guarantee, the return of high LTV mortgages across the market, the successful roll out of vaccinations, and imminently the easing of lockdown restrictions.”

Andrew Montlake, managing director at Coreco, said: “It’s no surprise net mortgage borrowing hit a five-year high in February, as a large number of Stamp Duty holiday-fuelled transactions that started last year completed in advance of the deadline.

“Though up on the same month last year, mortgage approvals were understandably lower than the November high as a lot of people, by February, felt they had missed the Stamp Duty deadline.

“There is still a decent amount of activity in the market at present, and lenders, though still more cautious than they were pre-Covid, have released a lot more products in recent weeks.”

Ashley Thomas, director of Magni Finance, added: “There is a lot of confidence in the housing market right now. Due to the extension of the Stamp Duty relief scheme and the success of the vaccination programme, more and more people see now as a great time to move.”