YourMortgage.co.uk: Mortgage crunch reflected inflated house prices

It has been suggested that the state of the mortgage market now is more akin to "normality" than it was two years ago when mortgages were relatively easy to come by.

YourMortgage.co.uk editor Barney McCarthy explained that the huge decline in lending over the past 12 months has been a reaction to how inflated the housing market had become.

"While house prices are lower than they have been for a long time – so it looks more affordable – the actual lenders themselves are more reticent to actually lend the money and are actually requiring much larger deposits than before," he said.

"Over the last couple of years it has almost been too good to be true and now it is returning to something more approaching normality."

Recent figures released by the Council of Mortgage Lenders show a drop of 44 per cent between the £18.7 billion lent in October 2008 compared to £33.4 billion just a year before.

With this in mind, it appears house prices are likely to continue to fall towards their true value and that homeowners will have to go that bit further to increase the value when it does come time to sell.

Whether this is through adding to the dining room with a glazed extension or converting the loft to give an extra bedroom, homeowners will need to offer a little bit extra to top buyers wanted lists when the market evens out again.