The UK could see the return of affordable mortgage deals over the coming year. This is the opinion of Katie Tucker, technical manager at mortgageforce, who said loan-to-value ratios are already improving and are likely to get better.

"We will start seeing decent 90 per cent deals at an affordable level - around five per cent - from most lenders," she commented.

Ms Tucker noted that mortgage providers will begin competing with each other again next year.

As a result, they will become more flexible with their credit scoring and underwriting again - unlike this year when some lenders refused loans to legitimate borrowers, she added.

Figures released by the British Bankers Association last year found that mortgage lending increased from 42,552 in October to 44,713 in November.

The total value of house purchase loans last month stood at £6.6 billion – up 208.7 per cent on a year earlier.

Written by Paul Governor