Remortgaging has declined by 57% since August 2008 due to restrictive lending criteria and the extremely low interest rate environment, according to the latest data from the Council of Mortgage Lenders (CML).
But, house purchase lending is recovering from last year's low levels last year, the figures show. It accounted for 53,000 loans worth £7.2bn in August; its largest share of total mortgage activity since 2002.
Overall, gross mortgage lending - which encapsulates house purchase, remortgage, and buy-to-let lending - declined 36% from August 2008 to £12.3bn.
However, CML economist Paul Samter says house purchase activity is now on a firmer footing after reviving from its moribund state at the beginning of the year.
"Remortgaging demand has fallen away in the low interest rate environment and this is dragging down gross lending levels overall," he adds.
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till