Homeowners and first-time buyers may struggle to secure a mortgage in the coming months, as lending between banks and building societies deteriorates in the wake of the Bear Stearns crisis, experts have warned. Daily Telegraph

Ray Boulger, of mortgage brokers John Charcol, called the Bank of England’s £5bn injection into the money markets yesterday 'a drop in the ocean', claiming the move will do little to ease the strained mortgage market in the UK.

He said the Bank’s move sees the likes of Abbey and the Bank of Ireland — which have access to funding from the more generous European Central Bank — in a very strong position compared to their rivals.

The cost of borrowing on the wholesale markets has seen a sharp rise as a direct result of Bear’s collapse on Friday, leaving lenders with little choice but to rein in their lending and pass on the extra costs to their customers.