“Over time the mortgage market should continue to improve from its current position. The number of products will steadily increase and rates will lower with increased competition between lenders. However, it will be a while before lenders regain a healthy appetite to lend with the maximum LTVs on offer largely determined by the future decline in property values,” commented Michelle Slade of Moneyfacts.

She added, “With all the above said it is highly unlikely that we will ever get back to the same levels that we were at a year ago. In the last month numerous lenders have cut rates, so borrowers looking for a new deal can take some comfort from the fact that the situation is steadily recovering.”

IMLA executive director Peter Williams says: “IMLA strongly contests the suggestion made by the FSA that all specialist lenders systematically operate a “one size fits all” approach to arrears management. MCOB 13 sets out a rigourous set of requirements regarding arrears and possessions.”

He added, “At the heart of it is the onus on the lender to work hard to reach a reasonable agreement with the customer in difficulty. All IMLA members adhere to MCOB 13 rules and regulations as set out by the FSA meaning they treat borrowers in difficulty as sympathetically as possible. Particularly in troubled times when arrears are mounting, it is in the interests of all parties to find an effective solution to overcome homeowners’ problems.”

Cath Hearndon, the director of My Mortgage Direct stated, “As independent advisers, we have nothing to gain from promoting one product over another. The deal that is most appropriate for the borrower is the one we recommend.  Far from the implication by Which? that insurance sold with a mortgage is akin to selling protector spray along with a pair of new shoes, life insurance is vitally important.”

“No-one buys a home without buildings insurance but plenty of people will take on the biggest debt of their life without insuring the very thing that pays for it – their life. My Mortgage Direct has already expressed concern that one in five mortgages are going ahead without life insurance.”

Phil Cliff, Director of Abbey Mortgages, commented: “With over eighty per cent of Brits taking measures to save money and earn extra cash, it’s clear that belts are tightening all across Britain. Careful financial planning and budgeting can help combat the effects of rising inflation, and everyone should ensure that they are shopping around for the best financial products.”

Cliff added; “Today, Abbey is reducing the rate on all its two and three year fixed rate mortgages by up to 0.15 per cent. This is the second cut to rates in two weeks and shows our commitment to offering competitive deals to customers.”

“At the moment it’s hard to point to any indicators that the mortgage market and the housing market are stabilizing,” said Simon Hayes, an economist at Barclays Capital in London.

“The impact of the tightening in terms of availability of credit could prove greater than is embodied in the central case in our most recent set of projections,” Deputy Governor Charles Bean testified. A “more persistent” or “more pronounced” slowdown may lead “inflation to undershoot the target in the medium term.”

Paragon’s managing director John Heron said: “Strong tenant demand has been pushing up rents, allowing landlords to achieve better yields than they’ve seen for more than two years.”

National Approved Letting Scheme’s chair Caroline Pickering said “An EPC provides the tenant with a clear indication of the energy efficiency of their accommodation which can only be a selling point for prospective tenants. It is a ‘win-win’ situation for tenants, landlords and lettings agents.”

Jonathan Moore, Head of Marketing at Mortgages for Business said: “There is currently an oversupply of new-build apartments, particularly in city centres, leading to concerns over property valuation and achievable rents. This has meant already cautious lenders are increasingly refusing to lend to this property type.”

‘People feel the bills mounting up and then they are falling behind with their mortgage. Often they do not face up to it until they are being taken to court. Sadly in about one in five cases we advise on, we have to tell people they will lose their home,” said Frances Walker of CCCS, a credit counseling agency.

Paul Mullins, chief executive at National Debtline, says “Attitudes have changed from a couple of years ago. The lenders know that, in the current market, they won’t get much for a property repossessed and then sold at auction.”

Those needing a bad credit mortgage are finding that they are having to come up with much higher deposits than in the past. The bad credit mortgage market has been hit hard by the housing crash and lenders are no longer willing to offer 100% loans. In fact, it has become nearly impossible to get a bad credit mortgage in the current climate. Right now, banks are not interested in taking risks on this market and are courting only those that have excellent credit. While some bad credit mortgages are still available, they are dwindling quickly and may not return for at least two to three years, until the markets restabillize.

“Borrowers with small deposits needing a higher income multiple have fallen out of the race,” says Katie Tucker, of Charcol, the mortgage broker. “It is more important than ever to have a spotless credit history and a 10 per cent deposit.”

She continued, “Historically, first-time buyers have needed to multiply their income by more than normal buyers would, to get the loan size they needed, but the two have now converged. This implies that the few first-time buyers who bought were those with high incomes.”