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The headlines paint a pretty gloomy picture and it is undeniable that consumer confidence in the housing market has taken a tumble. The Royal Institution of Chartered Surveyors has reported the lowest level of transactions since records began in 1978 and this is backed up by data from the Council of Mortgage Lenders.

Obviously, for consumers used to walking along the high street and getting a mortgage deal, the situation has changed.

Looking back to the start of 2007, homeowners were enjoying a low rate environment amidst a fiercely competitive mortgage market.

Fast forward to today and according to the latest figures the number of mortgages products available has dropped by two-thirds.

But there are still about 5000 mortgage deals out there and many lenders continue to innovate and invest.

Despite the obvious negativity we are starting to see signs of improvement. House prices continue to fall but the speed of decline is slowing.

House price indices show the July decline was 1.7 per cent, compared with 1.9 per cent and 2.5 per cent in June and May, respectively.

Though price falls will continue in the short-term, the longer term outlook remains positive, with a relatively solid labour market, low interest rates and a shortage of new housing stock, underpinning the housing market.

After months of headlines reporting rate increases the tide has turned. In recent weeks we have witnessed improvements on Swap rates and a number of major lenders have passed these on to customers through rate cuts.

It is important to remember the housing market is cyclical, with natural ups and downs. The events of the last 12 months do not herald a new era for the mortgage market but rather a change in the cycle.

The underlying issue is one of confidence and hopefully the glimmers of light on the horizon may give reluctant consumers some much needed reassurance. There are certainly no quick fixes on the cards but it is often said that time is the greatest healer and this is what the market really needs.

Kevin Purvey is head of intermediary sales for Cheltenham & Gloucester