Mortgage lending will not recover in next year - banks
Banks and building societies have told the BBC they do not expect any significant recovery in mortgage lending next year.
A new vetting process for mortgages could "cement in place restricted... lending", denying many the chance to buy the homes they want, they added.
The warning comes after figures showed new mortgages last month, at £12.4bn, were the lowest for a decade.
First time buyers are most affected by the lending drought.
Mortgage lending is barely a third of the level of three years ago, said BBC personal finance correspondent Simon Gompertz.
For first time buyers, many who could easily afford the monthly payments on a mortgage are prevented from buying because deposits are so high, he added.
The average down payment for new buyers is 24% of the price.
House prices declining
Meanwhile, financial watchdog, the Financial Services Authority (FSA), has put banks and building societies on notice that it will require stricter assessments of mortgage applicants' income and ability to pay, particularly if there's a significant rise in interest rates.
The lenders warn that this tougher regime would have prevented half of recent borrowers from getting a mortgage.
Last week the Council of Mortgage Lenders said mortgage lending continued to be subdued.
Total mortgage lending in October was the same as in September but the lowest October figure since 2000.
After picking up again earlier this year, property sales and house prices have been declining since the summer, surveys from the likes of Halifax bank have shown.
Meanwhile, the Royal Institution of Chartered Surveyors (Rics) has pinpointed a surplus of sellers over buyers as a key factor in the recent downturn in prices.