UK mortgage approvals fell in December but beat expectations to send the total for 2020 to the highest since the financial crisis.

Approvals for house purchase were 103,400, down from 105,300 in December and ahead of analysts average forecast for 100,000. Net mortgage borrowing of £5.6bn was broadly unchanged.

December’s figures took mortgage approvals for all of 2020 to 818,500 – a 13-year high. Approvals slumped to a record low of 9,400 in May but surged in the second half as the chancellor’s stamp duty holiday spurred a mini-boom in buyers before the 31 March deadline.

Consumer credit stayed weak in December as households made £1bn of net repayments after repaying £1.5bn in November. Total net repayments in 2020 were £16.6bn, the weakest year on record. Households have repaid debt during the crisis with money unspent during lockdowns and with economic uncertainty at high levels.

Samuel Tombs, a UK specialist at Pantheon Macroeconomics, said December was probably the last month of the mortgage lending boom after recent indicators such as Google trends showed the market cooling.

“Time is extremely tight to complete a transaction before the threshold for stamp duty returns to £125K, from £500K, at the end of March,” Tombs said. “In addition, the rapid rollout of Covid-19 vaccines suggests that most people will be content again with their pre-pandemic housing choices by the summer.”

Source Google News