Lenders who had benefited from the government’s Funding for Lending scheme would bow to pressure in 2013 and lend up to £10bn, LMS suggested, with a significant part of this funding flowing into low loan to value mortgages, and possible remortgages.

LMS chief executive Andy Knee said: “It will be a long time before remortgage activity reaches anywhere near its 2003 peak having been hit by reduced mortgage availability, lower lender SVRs as well as a rise in the number of lifetime mortgages.

“However, the FLS can already be credited with generating some excellent deals for homeowners looking for low LTV mortgages of less than 60% and we expect this to continue to boost activity well into next year. There is much less evidence of increased lender appetite for mortgages above this threshold.”

APH Mortgages managing director Steve Biggs said he agreed the remortgage market would grow: “Funding for Lending will assist large banks to price cheaply and for smaller lenders to compete on criteria rather than price, which could raise LTVs for remortgages.

“Many people on Standard Variable Rates with lenders at LTVs of up to 90% can’t secure a cheaper rate, but next year may be able to. It is also likely that we may see some SVRs increase next year which would encourage this remortgaging.”

Finance Planning chief executive Terry McCutcheon said while there were expectations 2013 would be a positive year, he expected lower growth of 10-15%.

“The other thing that would help is if lenders relaxed their rules on mortgage prisoners,” he added.