The proportion of new lending accounted for by remortgaging broke through the 50 per cent mark in January for the first time on record, according to figures from the Council of Mortgage Lenders.

Meanwhile, the Royal Institute of Chartered Surveyors has issued a report indicating that the rise in house prices slowed for the fourth consecutive month in January.

Forum Response: Council of Mortgage Lenders

Michael Coogan, director general of the Council of Mortgage Lenders, said: "These figures reinforce our view that affordability constraints will affect the market and cause a gentle slowdown. This now appears to be beginning, particularly among first-time buyers.

"The phenomenal rise in remortgaging reflects both the attractiveness of the refinancing deals available, and also the continuing appetite among consumers for equity withdrawal.

"With average loan to income ratios continuing to creep up, we would continue to urge borrowers to think hard about how to manage their levels of borrowing.

"With over a third of borrowers choosing fixed rates, it appears that a significant number of borrowers are taking the opportunity to offset the risk of higher mortgage repayments if rates do rise."

Forum Response: Royal Institution of Chartered Surveyors

Ian Perry, housing spokesman for RICS, said: "Predictions of a market slowdown appear to have been correct, as the effects of the slowdown ripple out from London.

"Last week's quarter per cent interest rate cut may steady nerves, but we do not believe at this stage that it will counteract the negative impact of another war in Iraq or the general feeling of economic uncertainty."