Figures from LMS showed the value of all remortgage lending dropped to £3.5bn in February, a fall of 16% on January’s figures.

The number of loans was also down, falling by 10% to hit 23,135 during the month. This is also down compared to February 2014, when 24,900 remortgage loans were recorded.

Borrowers are withdrawing much more equity from their home than a year ago. The amount withdrawn by remortgaging grew to £26,862 in February – a 41% rise from January.

This figure represents a 94% rise on the same point last year.

Andy Knee, chief executive of LMS, said growing house prices and low inflation mean more equity is being withdrawn from properties.

“Despite inflation reaching its lowest-ever level – falling to zero for the first-time on record – there has been a significant increase in the average amount of equity withdrawn through remortgaging,” he said.

“It is apparent, that despite the low inflation we’re experiencing, which should provide a boost to household spending power, many families continue to feel the pinch and remortgaging can provide a much needed source of income.

“House price growth witnessed throughout 2014 has meant that the increase in the amount of equity withdrawn through remortgaging has not increased the LTV ratio – some more good news for customers who could use the extra boost to their income but are cautious about increasing the size of their mortgage.”