People will no longer be able to afford mortgages unless serious action is taken within the industry, it has been claimed.
During the first quarter of 2008, gross lending has been estimated at £77.2 billion, according to the Council of Mortgage Lenders, a figure which is eight per cent less than the same period last year.
Commenting on the figures, director-general Michael Coogan warned that the Bank of England needs to take "early action" to prevent the industry suffering further losses.
"Lending on completed transactions is currently running at levels considerably lower than a year ago," he said. "However, the picture for mortgage approvals for new business and prospective lending levels in the next few months is worsening."
Any homeowners concerned about meeting their mortgage repayments should contact their lender at the earliest opportunity, Mr Coogan advised.
Figures from Shelter revealed that the average first-time buyer now pays out over 200 per cent more for their property than they would have done ten years ago.
