Data released from the Council of Mortgage Lenders (CML) showed that mortgage advances for 2010 fell to their lowest level in almost 10 years. Much blame has been put on lenders that their constraints on lending are too tight and without new borrowers coming into the housing market to purchase first level homes there is no lift to allow homeowners to upgrade to larger properties. Currently many first time buyers are being asked to provide deposits that are not only out of reach but often times exceeds an entire year's take home pay for an average worker in the UK.

In a recent interview with Bloomberg, Bank of England policymaker Adam Posen remarked on the current housing market as it is affected by lending saying: "You look at the difficulty many first-time buyers or younger people have in getting mortgages [and the] very low volume of transactions – these to me are things saying ‘I am much more worried about a downside risk to the housing market from here than any further appreciation.’

"My view is two things have supported the UK housing market in the last couple of years. One is our interest-rate cuts and quantitative easing directly affecting mortgage affordability and the second is that the level of UK homebuilding was relatively small for the size of the economy compared to Spain or Ireland or the US.

"You have both a demand factor through aggressive monetary ease and a supply factor in that the oversupply was much less. That to me is a very straightforward explanation for why housing prices have been relatively resilient."

A total of just £136.3bn was lent in 2010, the lowest level since 2000, and 5pc below the 2009 figure, which was the lowest total for nine years, according to the CML.