The increased competitiveness in the mortgage market could be due in some part to Northern Rock's "aggressive pricing" policy, it has been suggested.

Ray Boulger, senior technical manager at online mortgage broker John Charcol, said the bank is trying to "ramp up" its gross lending.

"To put some numbers on that, in the first three quarters of the year, Northern Rock lent £2.3 billion gross. Their target for the whole of the year is £4 billion gross, which I suspect they will struggle to achieve. Their target for next year is £9 billion," he explained.

Mr Boulger was responding to figures published by Moneyfacts.co.uk earlier this month, which stated that the average rate payable on two-year fixed-rate mortgages has fallen below five per cent for the first time in four months.

Northern Rock's loan pricing is forcing other banks to increase the amount they lend, he added.

First-time buyers planning to purchase a new property could make the process easier by placing some of their belongings in self storage facilities.

Written by Nicole Maher