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Reacting to the publication of the latest Bank of England (BoE) credit conditions survey, the CML urged the Crosby review to come up with recommendations that could provide immediate support to funding markets.

The BoE's credit conditions survey reinforced reports that demand from consumers for house purchase lending was declining.

The CML said this problem can only be solved by an increase in the supply of funding to the mortgage market, though concerted action.

Michael Coogan, director general of the CML, said: "Neither the cost nor the availability of wholesale funds has improved for lenders since the Bank of England launched its special liquidity scheme, helpful though that scheme is.

"This means that cost and availability to customers has not improved either. And this in turn means that consumers are now beginning to give up and demand is falling, with confidence in the housing market falling with it.

"But it is not too late to take steps to address the fundamental problem, which is the lack of funding available through wholesale mortgage funding channels. We urge James Crosby and the Chancellor to implement the necessary policies to achieve this objective."