Last week the BBC reported that Banks and Building Soceities had told them not to expect a significant recovery in mortgage lending in 2011 and added that proposals for a new vetting process would ‘cement in place’ the current state of restricted lending.

New mortgage lending is at its lowest for a decade and around a third of the level it was in 2007 according to Council of Mortgage Lenders figures.

In a recent report looking at the reasons behind the dramatic drop in mortgage lending the Council of Mortgage Lenders said that ‘there is strong evidence pointing towards constraints in the supply of mortgage credit in particular’.

The CML have come to this conclusion because the decline in lending coincided with the freeze in capital markets in 2007 which occurred before the economy entered recession and unemployment began to rise.

In laymans terms, the drop in new mortgage lending has had more to do with the lack of available funds for the banks to dish out than the willingness of people to btake on mortgages to buy and sell houses at present prices.