But there could be some light at the end of the tunnel with a growing number of securitisations and the recent launch by the Bank of England and HM Treasury of the Funding for Lending scheme.

The proposals – which in theory will allow banks and building societies to increase their lending activity through the provision of £80bn worth of cheap loans – show that the Government appreciates the importance of getting the mortgage market moving again and that lessons are being learnt from what is currently playing out in the Eurozone as several countries and their financial institutions lurch from one crisis to another.

On initial examination of the Bank of England’s launch statement, it appears that the primary beneficiaries of the new scheme are intended to be families and firms through first-time buyer friendly mortgages and competitive business loans respectively, but the first lenders to embrace the scheme haven’t forgotten about landlords – which is good news for the buy-to-let market.

The Royal Bank of Scotland, one of the first lenders to cut rates after throwing its weight behind the initiative, not only pared its 90% LTV and NewBuy compatible 95% LTV residential rates, but also unveiled a new 3.49% fixed or tracker buy-to-let deal.

Whatever way you look at it, the buy-to-let sector stands to benefit from the scheme, whether it is directly through the introduction of keener rates, or indirectly through lenders being able to divert more attention to the private rented sector as the funding pressures on other areas of their businesses are eased.

Sponsored

£2.5m paid to help broker clients benefit from greener homes

Sponsored by Halifax Intermediaries

No matter what part of the mortgage market one operates in, it is hard to refute the reality that first-time buyers are the lifeblood of the industry and that a steady supply of new borrowers makes for a healthier market overall.

They are the petrol, or the oil, that ensure the whole engine runs more smoothly and is able to fire on all cylinders.

However, before we all get too carried away and convince ourselves that the Funding for Lending scheme is the answer to all the market’s ills, it is worth bearing a couple of things in mind.

Firstly, mortgage rates aren’t the only consideration that first-time buyers have when seeking a mortgage. Saving for a deposit is possibly more onerous than ever before and with salaries plateauing and the cost of living still very high (despite recent falls in inflation), repayment affordability remains an obstacle, not to mention the paranoia felt by potential homeowners regarding economic uncertainty.

Secondly, there is no guarantee that the scheme will have the desired effect. The UK’s recent history is littered with well-meaning but ineffectual Government schemes that either failed to get off the ground or didn’t quite benefit as large an audience as was intended.

NewBuy and its various former incarnations helped hundreds rather than thousands and it is worth remembering there have been previous efforts to stimulate lending activity that have fallen flat.

The fact that the Funding for Lending scheme incentivises participants by making funds cheaper the more that is borrowed may see it succeed where others have failed, but all in all, it will be a case of waiting and seeing how warmly lenders across the mortgage market embrace it.

Either way, it can be easy to sit on the sidelines and pooh pooh such schemes before they are given a chance, so for now I will be adopting a glass half-full stance and hoping this scheme does its intended job and helps stimulate the market.

The recent reliance on private and overseas funding and lending to sustain growth areas such as bridging, buy-to-let and high net-worth is not a healthy long-term arrangement, so the sooner our domestic institutions can ramp up their lending activity, the better.

Bob Young is managing director at CHL Mortgages