Thought the issue might have been the thermostatic shower bar so had a new one on & still the same. What's strange though is once you get the hot water coming through then the shower works fine most of the day. The plumber I use said all the pipe work is as it should be now so as you said it's probably an imbalance & will need to move the pump position.
OK, I'll try to explain my thoughts a bit better.
The pipe carrying the hot water from the cylinder to the pump has to go up into the loft to feed pump. As long as that pipe is primed, IE has water in it (such as when you've just used the shower) it will trigger the pump.
However, because the pump is above the cylinder, this water can drain backwards out of the pipe back into the cylinder under various circumstances such as (1) when you draw water from another hot tap in the house (2) when the weight of the water in the pipe syphons itself out back into the cylinder over several hours.
When that happens, you've only got air in the hot pipe and the pump cannot suck air.
The cold side will always work fine because it is fed from the cold tank which is above the pump so the cold pipe is always primed with water.
In answer to your question, yes you could put the pump halfway up the cylinder and it might work as long as the cold tank can refill the cylinder as quickly as the pump is emptying it. Otherwise when the level in the cylinder falls to the level of the pump you'll be trying to pump air again!
Pumping air will burn out your expensive pump in quick time.
I've had some success with a little gadget called a Shower Power Booster. The inventor Alan Watts is extremely approachable and helpful. I'm sure if you contact him he will be able to suggest something.
Good luck, I would love to know how you get on.
Easy way to boost any shower or tap. Simple 3-step DIY installation & no electrician needed. As seen on BBC Dragon’s Den. Uses 95% less energy. Learn more
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