Mortgage lenders in the UK are not able to reduce mortgages rates as much as consumers would like, it has been claimed.
Writing in the Times, Andrew Ellson stated that some of the criticisms levelled at banks and building societies have been unfair.
He acknowledged that while such institutions now have the benefit of a reduction in the average wholesale cost of funds, other factors must be taken into account.
For example, they are making greater losses on bad loans during the recession.
In addition, lenders have to pay an increased levy to the Financial Services Compensation Scheme in order to refund savers whose money was lost in banks that have gone bust.
Also, mortgage costs are higher at present because many lenders now raise most of their funds through retail deposits and have to "pay handsomely to do so", Mr Ellson claimed.
A survey conducted recently by the National Association of Estate Agents found that 58 per cent of consumers believed lenders must provide more credit in order for the country's property market to recover from its current slump.