Mortgage availability is much lower than during the housing boom
Lenders expect the availability of mortgages to rise in the coming months as the outlook for the UK economy improves, a report has said.
The projection comes after availability dipped in the third quarter of the year, according to the Bank of England's Trends in Lending report.
New mortgages became slightly more expensive in August with a typical rate of 4.3%, up from 4.2% in July.
A lack of appetite for credit card borrowing and loans continued.
Lenders said that they had not seen any increase in demand for car loans, despite the pick-up in car sales driven in part by the scrappage scheme, the report revealed.
People with a chequered credit history could also find it more difficult to get unsecured loans in the coming months, with credit scoring criteria expected to be tighter.
The report pointed to recent data that showed a split between mortgages for house purchases and remortgaging.
Lending to those buying a home continued to increase in September, while remortgaging remained weak, the Bank said.
"As we surmised when we published our September gross lending data on Tuesday, the new report confirms that September saw a continuation of the two-speed mortgage market," said Michael Coogan, of the Council of Mortgage Lenders (CML).
"But, also as we have highlighted, funding conditions remain challenging, despite the encouraging signs of a slight thaw in wholesale funding markets.
"Today's report very much confirms our own assessment of market prospects - the most likely scenario is a slow and long, drawn out recovery."
Earlier this week, the Financial Services Authority proposed that regulation of mortgages should be tightened up.
Under the plan, lenders would have to verify every borrower's income before agreeing to a home loan.
The Trends in Lending report also said that repayments outstripped new lending to businesses in August, although this had eased compared with the previous month.
"Anecdotal evidence is very much consistent with the notion that there is more credit available to businesses, but that companies are having to pay higher spreads and bigger fees," said Philip Shaw, economist at Investec.