"Lending will be suppressed over the coming months, particularly for house purchase, while restrictions on movement remain in place"
Approvals for remortgage also rose on the month to 53,400.
Net mortgage borrowing by households was £4.0 billion in February, close to the £4.1 billion average seen over the past six months. The annual growth rate for mortgage borrowing picked up to 3.5%.
Simon Gammon, managing partner of Knight Frank Finance, commented: "February's strong lending data is largely down to a surge of deals agreed in the wake of December's decisive election result. Lending will be suppressed over the coming months, particularly for house purchase, while restrictions on movement remain in place and surveyors are unable to visit properties to carry out valuations.
"The lenders continue to show appetite to lend. Though some have withdrawn completely from the new purchase market, others have reduced the loan-to-value ratios at which they are willing to lend and continue to do business using automated or desktop valuations. We continue to see strong demand from borrowers to remortgage following successive Bank of England rate cuts."
Svenja Keller, head of wealth planning at Killik & Co, added: “Mortgage approvals at record highs is a really positive sign but Covid-19 is undoubtedly going to cause a downward turn next month. In this period of great uncertainty, most people will not want to move house and it is likely the majority of people will wait for house prices to fall significantly due to the pandemic.
“The fact that there was no additional credit card debt allows us to question the other options many are using including more expensive pay day lenders and overdraft options. February will have already seen a decline in spending due to Covid-19. Travel plans and other bigger expenditure would have started to be put on hold due to the uncertainty. Going forward, there are two options: many people will have to borrow money for everyday expenditure given that they may have lost their jobs or do not (yet) have access to government help. Equally, people are spending a lot less so it is also possible that less borrowing is going to happen over the next few months – next month’s figures will be very interesting.”
