Mortgage lending has been dropping and fewer are being able to enter the housing market and obtain a new home, especially first time buyers. This has caused a concern of major proportions by both those in the housing market and government as well. The economy’s recovery requires a housing market in recovery as well and that is not the case at this time.

There are those potential buyers that are finding it difficult to obtain lending. In recent months there have been new products brought to market by lenders geared toward the first time buyer but there are still fewer home buyers than what would make the market healthy. It is believed that there are many that are not willing to take on a house debt. The lower confidence by consumers has left many without the ambition to purchase at this time.

The buy to let market has seen a good surge as rental properties are in high demand. Where once it was assumed that the increase was mostly due to those unable to purchase being forced to rent, it is not the whole truth. Some are choosing to rent as a lifestyle choice and are awaiting to see how the economy plays out and confidence is restored.

Michael Coogan, Director General of the Council of Mortgage Lenders stated: "Pressures on household budgets have been increasing both in terms of take home pay, and indirect tax measures such as the VAT increase and recent inflationary pressures, so we were expecting a fall in transactions early in the year, and a flat mortgage market underpins our forecasts for 2011.

"The bad winter weather and uncertainty over interest rate rises will have exacerbated the fall in lending in January, so it would be premature to draw any firm conclusions about activity levels over the next few months. The market remains stable at low levels of transactions."