For first time buyers now more than ever will a deposit be an essential part of arranging a mortgage and making it onto the first rung of the property ladder.

Many lenders have reduced the maximum loan to values ratios on many of the mortgage deals, since October last year the tightening of credit in the money markets has forced many lenders to increase deposits to ten percent.

Many high street lenders Abbey, Halifax and Nationwide still offer loans of up to 95 percent loan to value.

It’s the more cautious lenders that are tightening their belts.

Since last June, ten lenders have pulled out of the 100% mortgages loan to value market while 11 lenders have reduced their maximum loan to value on some or all of their range since December.

The main 100% mortgages lenders Northern Rock, Birmingham Midshires, Coventry and Mortgage Express are still offering deals with income multiples reduced to suit todays market.

Talks are taking place to privatise and secure the sale of 100% mortgages lender Northern Rock. At last it looks like the preferred option for the Northern Rock staff, share holders and mortgage brokers could be announced by the Chancellor Alistair Darling in the commons on Monday.

Speaking in China, Mr Brown said: “Now we’ve been presented with a report that we commissioned from Goldman Sachs and it gives us a number of options for the future.

“It’s right therefore to have the discussions with the private sector.

“All options, including public ownership, on the road to moving the firm back into the private sector are on the table and are available to the government.”

 Ever since the crisis happened 100% mortgages offered by Northern Rock have not been competitive within the market. Hopefully the new company will be able to offer a product that is still very much needed within todays first time buyer market.

Surveyors are reporting a falling house prices similar to the 1990’s housing recession. The property market is in the midst of a property slump. The bad credit mortgages have taken effect according to many studies.

The report, by the Royal Institution of Chartered Surveyors (Rics), warns that the number of its members reporting falls in house prices has climbed to its highest level since the height of the last housing crash in the early Nineties.

Recent data shows house prices fell apart from a slight increase in October of 0.1%. Halifax and the Nationwide building society have suggested the market weakened in December.

The Rics study said that only one per cent of its surveyors reported a rise in house prices in the last three months of last year, compared to the 61 per cent who reported a fall.

The decision has been made by the Bank of England to keep rates at 5.5%. They have resisted pressure to make a change against growing pressure from retailers.

It must have been a tough decision with all the recent signs in consumer spending and the inflationary pressures. A rate cut could have lifted both consumer and general business confidence; it could also have risked fuelling price pressures growing on the back of higher energy and food bills. Npower increased its gas and electricity prices last month and warned other providers would follow suit.

The British Chambers of Commerce said the MPC had missed an important opportunity to underpin confidence and limit the damage to the economy.

“A modest interest rate cut would have alleviated the threats to the banking system and would have helped restore the smooth flow of credit in the economy,” said David Kern, economic adviser to the BCC.

Analysts are expecting the MPC to cut rates in February.

According to the Halifax house price inflation fell sharply at the end of last year, but rising at an annual rate of 5.2%. They still rose by 1.3% in December half the rate from three months earlier. “This mixed pattern of monthly price rises and falls is a typical characteristic of a subdued market,” said Martin Ellis, chief economist at the Halifax.

There are many reasons now why rates need to be cut.

Businesses make capital and investment decisions based on possible growth of their companies. Or they may implement cost cutting measures.

The bad credit mortgages credit crunch has strangled credit; banks are in no mood to ease the pressure at the current rates.   

Economists tend to point to 4.5 to 5% as the neutral point. This is the level at which rates are seen as either slowing the economy or driving it forward. First time buyers might stand a chance of making a decision. Nobody wants to by at the wrong price.

It is hard to overstate the effect they have on consumers. Notwithstanding Halifax’s figures yesterday, the trend looks set for flat prices this year at best. Home-owners, used to the warm feeling from the automatic 10 or 20 per cent appreciation of their homes each year, are going to feel chillier and poorer.

 There is very little danger that a rate cut would produce an upturn in the housing market. Whatever happens to base rate, mortgage bills will remain much higher than then. The banks haven’t fully passed on last month’s cut. Remortgage rates shouldn’t change drastically.