The report from the Building Societies Association (BSA) said that pessimism in the market remained.

BBC: Home buyers 'nervous about year ahead'

Last week though, the Building Societies Association warned that the current blockage in the mortgage market might last for another two years.

BBC: Mortgage lending hits 33-year low

The Building Societies Association (BSA) said it was not surprised by the downgrades, which it described as a "normalisation" that had "been expected for some time".

BBC: The Principality Building Society in Wrexham

Paul Broadhead, of the Building Societies Association (BSA), said that this type of mortgage had worked well for many people, but help was available for those who found themselves in trouble.

BBC: Shortfall fears for interest-only mortgage holders

"Lending activity has recovered in recent months, when compared to the start of the year, as buyers and sellers tentatively return to the market, " said Adrian Coles, of the Building Societies Association (BSA).

BBC: Strong rise in mortgage approvals

These predictions were echoed by Adrian Coles, of the Building Societies' Association.

BBC: Bank governor offers bleak view