Home owners are starved for equity in the aftermath of the credit crisis, causing very few of them to be able to remortgage. The latest statistics showed only 27,000 people remortgages in June, which is 20 per cent lower than this time last year.

Ed Stansfield, chief property economist at Capital Economics, described the humbling tone of homeowners saying : "There is a sense that people have too little equity in their homes to be able to switch their mortgage, and even if they do have enough, there is little incentive to do so."

He added: "The rates on offer - once arrangement fees are taken into account - to move from a lender’s standard variable rate are not particularly strong. There are simply not the incentives for people to switch and they have too little equity to make it easy to do so."

Experts commented, the summer months typically see an increase in new home loans, and that is what occurred in July from June. The number of loans approved for those buying a new home rose almost 20 per cent. Lenders appear to be hand picking the best applications to approve, while repossessions still run rampant through the UK.

House prices still struggle to recover as they have yet to see levels present before the crisis of 2007.

Paul Samter, economist at CML, described proceeding with caution, saying: "For the time being the effects of government spending cuts have yet to make an impact on mortgage demand, and activity continues on its upward trajectory.

"But we still expect house purchase activity to be muted in the coming months. Both consumer demand and lending capacity remain distinctly difficult to call, especially in the light of the government’s austerity measures and their possible impact."