The Council of Mortgage Lenders (CML) has revealed the number of mortgages lent to house buyers fell last year to its lowest level since 1974, with just 516,000 mortgages granted to house buyers, down -49% from 2007.

The squeeze on mortgage funds has seen lenders tightening their belts, which meant that first time buyers had to put down an average deposit of 22%. The CML believes that lending is likely to fall even further this year.

Michael Coogan, the CML’s director general, said: “The shortage of mortgage funding and reduction in the number of active lenders has reshaped the mortgage landscape in the space of a year.This low level of transactions is insufficient for the functioning of an efficient market.”

The slump in lending and sales has been directly responsible for the sudden collapse of house prices seen since the credit crunch started in the summer of 2007. Last year, the number of loans to first-time buyers fell by -46% to just 194,200, which was the lowest figure since the CML’s records started in 1974.