The Daily Telegraph has reported that Stephen Nickell, one of Gordon Brown's chief economic advisers, has warned of 'mortgage rationing', where thousands of homeowners are unable to remortgage themselves and many more unable to get on the property ladder.

Prof. Nickell, chairman of the National Housing and Planning Advice Unit, explained that as lender's criteria tightens, with banks refusing to lend to 'riskier' borrowers, the outlook for the broader economy gets worse.

He said: "What we're seeing now is a loan strike. It's almost as if we are back in the bad old days of mortgage rationing. No one will lend to first-time buyers. What unnerves me is the fact that there are good borrowers out there and people aren't lending them money."

Furthermore, the fall in prices isn't helping the lower end of the market as lenders are asking for large deposits and whiter than white credit histories.. He added "If you look at affordability in the broadest sense - that is both the price of houses and mortgages - things don't seem to be improving things at all."

Roy Berry of The Mortgage Provider agrees with Prof Nickell, "as a mortgage brokerage we are seeing good clients refused by lenders for the pettiest of reasons. Lenders now pour over your bank statements for any sign that you are a risk; a missed payment hence becomes a big deal, and can mean the difference whether you get your mortgage or not".

There has been a surge in business for mortgage brokers over the past few months as people have been worrying about the expiry of their fixed rate deals.