New mortgage lending continued to fall in November, according to the latest figures from the Council of Mortgage Lenders (CML).
The number of new loans granted was just 33,000 - 17% fewer than in October 2008 and 59% down from November 2007.
First-time buyers had to put down an average deposit worth 18% of their property's value, the largest for at least 35 years.
The CML predicted that lending would fall further in the next few months.
"Limited mortgage funding and reduced consumer demand will weaken lending activity further in coming months," said the CML's director general, Michael Coogan.
"The flow of funds to the mortgage market will not improve this year without further intervention by government," he warned.
Lower interest rates
The CML said many first-time buyers would continue to struggle to raise the money for such large deposits.
These are being demanded by lenders as a method of rationing their limited mortgage funds, and to protect themselves against losing money if borrowers default while house prices continue falling.
Mortgage costs have been falling in recent months, in the wake of the successive cuts in Bank Rate by the Bank of England.
And the lenders' organisation advised borrowers to take advantage of the new conditions.
"Borrowers who are benefiting from lower mortgage rates should overpay if they can afford it, to reduce their mortgage balance and protect themselves against falling house prices," Mr Coogan said.
"And now is also a good opportunity for borrowers on interest-only mortgages to switch to repayment mortgages, to use this period of low interest rates to start to pay down their loans," he added.
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