The property market has seen a decade-long boom come to a halt
Mortgage lending showed a slight rebound in April, according to the Council of Mortgage Lenders (CML).
Some 50,700 loans to purchase homes were granted in April, a rise of 5,000 from the previous month and the highest level since December.
But the number was still 36% down compared with the same month in 2007 because of the credit crunch.
An average first-time buyer put down a deposit of 13% of a property's value and borrowed 3.3 times their income.
Michael Coogan, CML director general, said that the low levels of lending were set to continue.
"Monthly house purchase lending volumes continue to be lower than last year's levels and there will be a further weakening in coming months as recent approvals data has shown," he said.
The credit crunch has caused the banks to cut back on lending, especially to those they consider to be more of a risk.
The Bank of England made extra funds available recently to encourage banks to lend to each other.
But Mr Coogan said: "The squeeze on mortgage funding has led many lenders to tighten their lending criteria.
"While tighter criteria make it more difficult for some borrowers to obtain a mortgage, they also reduce risk in a slower housing market."
First-time buyers have felt the effects more than most, and the CML figures show that such borrowers have been asked to put down bigger deposits in recent years.
The CML data shows that the 13% deposit of a property's value put down by the average first-time buyer is the largest for more than three years.
This trend has been reinforced by the UK's largest lender, the Halifax, which will increase the interest rate on its new three-year fixed-rate deal for customers who want to borrow between 75% and 90% of a property's value from 13 June.
However, customers who need to borrow less than 75% by putting down a bigger deposit are being offered cheaper deals on tracker and fixed-rate mortgages.
The number of loans granted to first-time buyers did rise slightly in April compared with March, up 4% to 18,500, but this was still 36% lower than a year ago, the CML said.
Turning to fixed-rate
Gross mortgage lending in the UK rose 8% in April to £26.1bn, from £24.1bn in March, after two consecutive months of decline.
Fees charged on new mortgages have rocketed, experts say
Remortgaging accounted for 42% of gross lending in April and has continued to be more buoyant than house purchases as large numbers of borrowers exit fixed-rate mortgages.
There were 83,000 loans for re-mortgage worth £11bn, up 14% in volume and 11% in value from March.
Homeowners have also increasingly turned to the security and certainty of fixed-rate mortgages. The proportion of borrowers taking out fixed-rate products increased to 59% in April, up from 54% in March and the largest proportion since December last year.
Homeseekers have also been urged to do the maths when looking for a new mortgage owing to the rise in application fees.
Price comparison website Moneyexpert.com said that in September 2006, only 22 fixed mortgage deals charged application fees of £750 or more.
But now that figure has risen to 323 fixed mortgages, a third of the total fixed mortgage market.
"Anyone looking to remortgage or to buy a property for the first time will need to recalculate their options if they haven't factored in fees," said director Sean Gardner.
"The days of fee-free mortgages are over and frankly getting anything under £1,000 is something of a coup."