Househunters are in for a frustrating spring as banks turn away increasing numbers of would-be buyers looking for mortgages.
A report by the Bank of England today showed that recent improvements in mortgage availability stalled in the first quarter of the year and is unlikely to improve in the next three months.
The expected shortage of mortgages is a blow to the growing numbers of househunters planning to apply for a home loan this spring.
First-time buyers will be particularly hard hit as lenders demand deposits worth around 20% of the value of the house.
The housing market cooled after New Year because of the wintry weather and the end of the stamp duty holiday, but demand is expected to pick-up in the coming months.
Businesses fared better than consumers, with lenders reporting an increase in borrowing options for companies, with further improvements expected during the coming quarter.
But lenders put the squeeze on small businesses during the first three months of the year.
The Bank of England said the cost of borrowing for small firms increased in the first three months of 2010.
