The latest Credit Conditions Survey from the Bank of England suggests little change in the availability of mortgage finance in recent months, according to Simon Rubinsohn RICS chief economist.

RICS believe that this broadly stable picture is expected to persist during the early part of 2011. Significantly, the report indicates a continuing preference amongst lenders to steer away from higher risk loans.

While the availability of finance for ‘lower’ loan to value mortgages (75% and less) has actually increased, its availability has contracted where smaller deposits are being put down by borrowers who are deemed to be a higher risk.

“This contrasting picture clearly demonstrates the obstacles that first-time buyers will continue to face in trying to get a foothold on the property ladder. Even without the implementation of the tough recommendations to the Mortgage Market Review from the FSA, lenders will continue to be cautious in the provision of finance,” said Rubinsohn..

“This suggests that the total number of mortgage approvals in 2011 will not be very different from last year. It also points to a further increase in demand to rent property. As the last RICS Residential Lettings Survey indicated, the imbalance between demand and supply is already leading to sharply higher rents.”