With so much focus on CCJ loans, it becomes clear that many individuals are simply unable to achieve the type of loans that they require and cannot function in the market the way it currently exists. Until such time as the market is greatly improved, the types of loans will be almost impossible to achieve for those with less than perfect credit. While there are those who can still qualify, it is less than suitable due to the extremely high risk and reluctance of credit institutions to make these types of loans. The financial institutions are extremely wary of a reproduction of past performance with the credit markets and the difficulties in maintaining solvency.

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Fionnula Earley, an economist with Nationwide stated, “This change in behaviour could be an indication that borrowers are keen to be sure of their outgoings in uncertain times and wish to protect themselves, even though the choice may be more expensive in the long run.”

“We expect the next move in the Bank Rate to be down, but the extent to which this will revive the mortgage and housing market is likely to be limited while overall confidence in the economic housing market conditions is low.”

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Louise Cuming, head of mortgages at moneysupermarket.com, comments: “Lenders do not have to rely on headline rates to hook borrowers in at the moment.

“Often a great headline rate has come with an extortionate fee, but lenders are being much more transparent now about the true cost to the consumer and where their profit comes from.

“Higher rates might seem unpalatable for some people; however, those lower fees can make it cheaper for borrowers on a smaller mortgage. Consumers must look at both the fee and the rate if they want to work out the best deal for them.”

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RICS spokesperson, Ian Perry, said: “The lack of mortgage finance has brought the housing market to a virtual standstill with first-time buyers rapidly becoming an endangered species. Going forward, there are signs that sales activity might pick up a little as sellers start to re-evaluate unrealistic asking prices.”

He added, “The current confused messages from the Government regarding stamp duty risks damaging any returning confidence and may discourage mobility.”

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Sue Edwards Head of Consumer Policy at Citizens Advice said: “We welcome the findings of the FSA’s research on lenders’ mortgage arrears and lending practices, which mirror CAB clients’ experience. Our 2007 evidence report showed that in some cases lenders have taken borrowers to court without exploring all the other options available to address the arrears resulting in excessive costs, stress and worry for borrowers. This could be avoided if lenders had acted in accordance with the FSA rules that govern arrears management practices. Bureaux also see cases where it appears that the lender had taken little or no account of the borrower’s ability to repay the mortgage. The borrowers got into mortgage arrears and faced repossession.”

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Andy Gray, Head of Mortgages for Woolwich, said: “We have seen an improvement in the SWAP rates recently and have taken the opportunity to reduce our longer term fixed rates where we see customers can get the best value at the moment. We have also decided to introduce a market leading Lifetime Tracker rate as we still feel this type of product offers the best value in the market at the moment, easily out stripping any two year fix.”

“We are also pleased that we have been able to narrow the gap in product pricing to brokers. A couple of weeks ago we reduced the rate to a maximum of 0.10 percentage points and this week all our new products will be available direct or through brokers at the same price.”

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Alliance & Leicester said: “It is not unusual for slight changes to be made to our mortgage affordability calculator. It is well documented that the cost of living is rising, and these changes reflect that.” Nationwide said: “It will bring us in line with FSA requirements for responsible lending and it is in everyone’s interest to act with caution.”

Melanie Bien at broker Savills Private Finance. “Your bank isn’t the only one that has two levels of pricing on its mortgages – one for existing customers and another to attract new business.” She adds, however, that not all lenders do this to such a degree. “Since you can only fix at the same level as its standard variable rate (SVR) for a fee, your lender is obviously putting more effort into attracting new customers than it is into keeping you.”

“The total cost of all fees plus the interest rate should be calculated when comparing one mortgage with another. You may assume that lenders would charge the same fee for running or closing a mortgage account, but this is simply not the case. Fees vary considerably and lead to charges of profiteering for the worst offenders,” says Melanie Bien of Savills Private Finance.

Darren Cook, of Moneyfacts.co.uk, says: “If a lender charges a fee of 1 per cent, a borrower with a £100,000 mortgage will pay £1,000, while a borrower wanting a loan for £500,000 will have to cough up £5,000, even though the lender is doing the same work.”

Ray Boulger of John Charcol commented, “We might look back at this moment and say this was the peak for gilt yields and therefore the peak in fixed-rate pricing. And for lenders in a strong capital position, there is now a very good argument for increasing your lending to the maximum. The margins that they can obtain today are at a level they would have died for a year ago.”

Chancellor Alistair Darling stated, “I’m very concerned that people ought to be treated fairly, especially people coming off fixed rates and going on to different rates. We have met the Council of Mortgage Lenders to try to reach an agreement to ensure that people are treated fairly, but if that isn’t happening I will ask the FSA to pursue the matter.”

Chris Cummings, Director General of AMI, said: “In the first quarter of this year, consumers have increasingly turned to our members to seek out professional mortgage advice. For example, over 80% of First Time Buyers used an intermediary - a 10% increase on the previous year. The re-mortgage markets also saw intermediary business up by 10%.

“Our members provide mortgage advice that is wholly focussed on the individual consumer’s needs. This means finding suitable products and providing high levels of customer service. Our recent research shows that 8 in 10 consumers chose to use an intermediary for mortgage advice and only 2 in 10 selected them because of cost.”