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Despite the average number of products available on a monthly basis plummeting from just under 80,000 in April 2007 to just less than 14,000 in July 2008, the sourcing system provider believes the market has now levelled off.

Figures published by Trigold illustrated while the average number of intermediary products fell by 5 per cent in July compared with June, there were still 183 more products accessible to advisers, a 1.3 per cent increase on May.

David Aylmer, marketing and business development director of Trigold, said while there were less products available this was "almost certainly" the result of lenders limiting the number of distribution partners on their packaging panels.

He said the most recent results were a strong indication the market had turned a corner in terms of product numbers and the industry should take heart from this.

Mr Aymler said: "Last month's report saw the first rise in product numbers in the previous 12 months and although there has been a drop in July it is by such a minimal number that many will rightly view this as market stabilisation.

"Although the number of live products is still considerably down on last July's figures, the data suggests product availability will remain around the 15,000 mark, the average for the past four months. It is early days but this is an encouraging sign for the mortgage market."

Trigold's data also revealed the number of mortgage sources carried out by advisers fell by 5.74 per cent between June and July, a combined fall of 26 per cent in the last two months.

However Mr Aylmer said despite the recent falls, activity levels compared with 12 months ago showed a slightly rosier picture, with activity down just 1.01 per cent and fewer than 1000 mortgage sources performed.

He said: "This slight slowdown in activity matches recent commentary in the industry but this is far from being a major fall - or a major correction - but should be seen as a steadying of market activity."

Sarah Gwilt, mortgage associate for Birmingham-based IFA Essential Money, said she would have been interested to see how the fall in intermediary products in the last 15 months mirrored the availability of direct products.

She said despite the fact Trigold was claiming stability was returning to the market there were still a number of borrowers struggling to remortgage.

She said: "In the market we are in lenders can cherry pick."