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Since the Bank of England lowered the base rate of interest for loans and savings more than two years ago, the remortgage market in the UK has practically dried up altogether, as the majority of borrowers have found it much cheaper to remain on their existing lender’s standard variable rate loan than it is to switch to a new loan deal.

But the latest figures from the Council of Mortgage Lenders (CML), have shown that the number of people switching their home owner loan to a better deal through a remortgage, has now overtaken the number of loans for house purchase.

Remortgage loans accounted for 37 per cent of the loans market over the course of the first three months of this year, up from 30 per cent of all loan deals during the last quarter of last year, as borrowers try to switch their loan before interest rates rise, possibly later this year.

Although the number of home owner loans for new house sales have also increased by around 24 per cent between February and March this year, new home owner loan sales are still significantly lower than they were at the same time last year.

Although there has been a significant increase in loan activity for the first three months of this year, the CML said that activity was likely to become more subdued as the year progressed.

Michael Coogan of the CML said “Looking ahead to lending figures in the coming months, the Easter, Royal wedding and May Day bank holidays will impact on the level of activity, timing and spread of completions in the second quarter meaning that any one month’s data should not be interpreted as a reflection of a trend.”

“It may take until the second quarter’s activity to get a full understanding of how the market has reacted to the squeeze on household incomes.”