Mortgage lending has reached levels not seen since 1974, the latest figures from the Council of Mortgage Lenders have revealed.
There were just 516,000 mortgage loans last year, the lowest level in 35 years, according to the Council of Mortgage Lenders (CML).
The figure - 49 percent down from 2008 - reflects the poor health of the property market. December saw 32,000 house purchase loans, a fall of five percent from November and the lowest figure since monthly levels began being recorded in 2002.
"The shortage of mortgage funding and reduction in the number of active lenders has reshaped the mortgage landscape in the space of a year," said CML director general Michael Coogan. "This low level of transactions is insufficient for the functioning of an efficient market."
The industry has seen a number of government initiatives launched both to get the market moving and help homeowners who have fallen into difficulty. However, Mr Coogan warned that it will take time before these moves have an impact.
"Measures are now in place to seek to restore the flow of funding to the mortgage market, but this will take time to feed through," he said. "Further action may still be necessary to increase transactions, stabilise prices and restore confidence."
Andrew Montlake, from mortgage brokers Cobalt Capital, commented that the news was not surprising and merely "crystallises what we already knew, namely that from a mortgage perspective, 2008 was a massacre".
