A financial expert has questioned the viability of the Financial Services Authoritys decision to cap lending for properties and potentially outlaw 100 per cent mortgages.
The move will damage the chances of first-time buyers getting a foot on the property ladder and ultimately harm the housing market, according to Moneyxtra.com managing director Richard Mason.
"Lenders should not allow the government to dictate their lending criteria," he suggested.
"Rather the FSA should focus on challenging lenders to ensure theyre operating comfortably within a stable and predictable property market."
Mr Mason also noted that the number of first-time buyers getting into the market has a direct impact on the industry and said restricting their chances could drive prices down further due to lack of activity.
First-time buyer specialist First-rung recently noted that those looking to get on the property ladder are being asked for deposits of around £28,000.
The lack of suitable buyers may eventually lead to some sellers deciding to keep their properties, preferring to focus on improving them with things like roof lights or lean-to conservatories.