Prospective home owners are finding it more difficult to obtain a mortgage to buy a property, according to the latest figures from the Bank of England.

The number of mortgage approvals in March was 49,860 - a sharp drop on the 58,000 approvals in January.

Lenders started making their borrowing criteria more restrictive, triggering a fall in the proportion of mortgages being approved.

The announcement happens just after more than a million home owners saw the cost of their mortgages payments increase from Tuesday.

Recession

In some cases payments rose to as much as hundred pounds a month.

Lenders blame the worsening economic climate, as the UK economy has re-entered in recession.

Experts say that mortgages demand has risen more than supply, which puts pressure on lenders.

Meanwhile Sir Mervyin King, the governor of the Bank of England refused to "blame anyone - this was a failure of the system," he told BBC Radio 4's Today Programme.

"We were certainly late to the game in understanding the scale of the fragilities in the banking system and the potential consequences when the risks materialised, but we were in good company. It was not the case that people were saying 'gosh, you really should raise interest rates to slow down what's happening in the banking sector'," he said.

Letting agencies

With low access to credits, loans and mortgages, first-time buyers seem to be most affected as they will have to save more for a deposit and pay higher mortgage rates.

Meanwhile, letting agencies have benefited and have reported high demand.

Latest data from the Association of Residential Letting Agents (ARLA) shows that in the first quarter of this year, 50% of its members reported increased achievable rent levels, in line with news of rising rents across the UK.

"Our members also report a decline in the number of properties coming onto the rental market because they can't be sold,
suggesting that the initial boom in 'reluctant landlords' joining the PRS is coming to an end."

In Sheffield a letting agency applauded the current mortgages position.

A spokesperson of Martin & Co told JUS NEWS "people have to live somewhere, it is more business for us."