Home buyers looking to secure a mortgage have been warned they could be left out in the cold over the coming months.
The warning comes after the latest data from the UK's high street banks revealed that activity in the mortgage market continued to be subdued in October.
The British Bankers' Association (BBA) revealed that the number of mortgages approved for house purchase was marginally lower during October compared with September, while gross mortgage lending of £7.6 billion represented the lowest total reported since February 2001.
The BBA said the ongoing low levels of lending were a result of weak mortgage market activity, and reflected lower consumer confidence and the uncertain prospects that face households.
Unfortunately, expectations are that the problems currently being experienced by those searching for a mortgage are set to carry on into next year.
"Demand for mortgages is likely to remain sluggish, as household incomes fail to keep pace with inflation, which currently stands well above target at 3.2%," explains David Newnes, estate agency managing director of LSL Property Services.
"This will keep a lid on aspirations among would-be buyers and when interest rates rise, probably in the first quarter of 2011, the pain for households will increase."
Richard Sexton, business development director at e.surv, said that the current weakness in the mortgage market was a reflection of both nervousness among potential buyers and also the more restrictive credit conditions being felt by mortgage lenders.
However, beneath the surface, Mr Sexton said he felt that a two-speed mortgage market was in operation.
"Approvals are actually up for the most expensive properties – wealthy buyers are using large deposits to side-step lending restrictions, and they are more likely to be in parts of the country, like prime London, which have been more insulated from wider market weakness," he explained.
"The flip side is that approvals for cheaper properties have fallen dramatically."
Mr Sexton also said it was hard to foresee a significant improvement in the amount of mortgage lending, particularly with the banks having to deal with the various Government support schemes coming to an end and new regulation coming into force.
"Add sovereign defaults into the mix and lenders are likely to be pretty risk averse for a while, leaving hopeful mortgage borrowers out in the cold," he concluded.
While the mortgage market is not as thriving as it once was, there are still a considerable amount of competitive mortgage deals around if you know where to look.
Our mortgage best buy charts list the leading mortgage deals currently available, whether you're a first time buyer or looking to remortgage, or whether you want a fixed rate mortgage deal or a tracker.
Make sure you keep a close eye on the best buy charts – you might just find what you are looking for.
Find the best mortgage rate - Compare best selling mortgages
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.