A mortgage lending squeeze will result in property prices falling across Britain, but London's most desirable residential districts will be least affected, analysts say.
Net mortgage lending in Britain has fallen 90 per cent in three years. The gap between new loans and repayments will narrow to GBP10 billion (HK$123.8 billion) this year compared with GBP100 billion in 2007, the Council of Mortgage Lenders (CML) reports. The body warns there could be negative net lending - more mortgages repaid than loaned - next year because the number of new mortgages is shrinking.
Many lenders have withdrawn from the home loans market. The CML was unable to complete this year's top 30 mortgage lenders' table because there are only six principal lenders now.
Investors, the self-employed and first-time buyers struggle most to get a mortgage - they must put down larger deposits than before the credit crunch and have fewer mortgages from which to choose.
Hong Kong and other overseas buyers must go through more credit checks, put down larger deposits and contend with frequently changing lending rules when dealing with High Street banks.
'The golden age of home ownership is over, for the moment,' Michael Coogan, the CML's director general, told a housing conference last month. 'Mortgage rationing has limited activity and left pent-up borrower demand unfulfilled since 2007.'