The latest Mortgage Monitor from e.surv has found that 66,174 mortgages were approved during March 2019 (seasonally adjusted).

This figure is 4% higher than the same month a year ago, even if the purchase and sale of properties continues to be subdued.

Low rates have created favourable conditions for existing homeowners looking to take out new loans, and first-time buyer activity has increased, despite the slowdown in the wider market.

Across all parts of the market, approvals were also up month-on-month, rising 2.9% between February and March.

The proportion of loans given to small deposit borrowers fell slightly compared to the last survey, but still represents a significant share of the mortgage market.

The number of loans to these customers dropped from 26.3% to 26%.

Richard Sexton, director at e.surv, said: “Mortgage rates have increased slightly compared to the rock-bottom lows of the last few years.

“However, rates are still close to their historic lows which is good news for those looking to take their first steps.

“This is reflected in the number of approvals this month.”

The recent squeeze on borrowers with large deposits continued into March, with the proportion of loans going to this part of the market falling once again.

Some 26.2% of all mortgages were taken out by this type of borrower in March. This is down on the 26.9% recorded in February.

This is even further back from the 28.1% ratio seen in January and the 30.1% found in December.

This fall, coupled with the modest drop in small deposit lending, meant that mid-market borrowers were the main beneficiaries.

Almost half of all loans went to this segment of the market – 47.8%. This is higher than the 46.8% recorded a month ago and further ahead of the 44.8% from January.

On an absolute basis, the number of small deposit borrowers fell from 17,480 to 17,205 between February and March.

Sexton said: “With almost half of all mortgages going to mid- market borrowers, it is clear that many current homeowners are still coming to market for new loans.

“This may be because they are keen to lock into loans at the current historically low rates in the hope that it will save them money in the long term.”