The Bank of England (BoE) has warned in its third quarter Credit Conditions Survey that high street banks are now becoming even more strict about mortgage lending due to concerns of an impending rise in unemployment.

This is despite lenders finding that credit availability had increased slightly over the last three months and some rates actually coming down.

So even with money available the tightening of lending criteria could well mean many people get turned down for mortgages or are not offered the best deals. This will affect first time buyers and re-mortgages alike. It will also re-ignite fears of a 'double-dip' recession.

But while lenders were going to be taking a more "cautious approach" to lending demand for mortgages has, according to the BoE, unexpectedly fallen.

It looks like the last gasp of air has been pumped into the housing market and now the only way is down. Even if people are looking and dreaming they are not buying in what is normally the best period for estate agents between Summer and Christmas.

Many people who re-mortgage when their current deal ends may find themselves with less to spend every month as they couldn't qualify for the better deal. The people who inflated their incomes on paper so as to snag the best rates a few years ago will find that this time the banks will be going over their payslips and bank statements with a fine toothed comb.

This tightening of criteria will affect the BTL investors too. People who rent also need jobs to keep the roof over their heads. And the rent they pay covers the investor's BTL mortgage.

There is now nothing underpinning the current housing market. There is no money out there to buy many houses. But prices will not start dropping until the people who own them are in a position where, for whatever reason, they absolutely have to sell. That process will take many years.

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