A lack of mortgage finance is not behind the dramatic slowdown in the UK property market, HSBC has argued.

The mortgage lender claims some 98 per cent of would be homebuyers can secure an appropriate mortgage, but are unwilling to do so while house prices are falling.

The latest Halifax house price survey records property prices dropping by an average of 8.8 per cent over the year to July.

It is this, and not an unwillingness among lenders to provide mortgages which is preventing the market from stabilising, argues HSBC.

“There is a perception at present that banks are not offering mortgages. In fact, our latest study suggests that access to finance is not a major issue,” explained Martijn van der Heijden, HSBC’s UK head of mortgages.

“Instead, many buyers are taking a wait and see attitude, naturally some feel uncomfortable buying a home which may be worth less in six month’s time.”

However, research from MoneyFacts.co.uk finds the number of mortgage products in the market has fallen sharply since the onset of the credit crunch.

HSBC claims one in ten Brits is aspiring for a place on the property ladder or trade up – but have decided hold off for at least six months.

Of those choosing to delay the purchase just two per cent said they had difficultly getting a mortgage, but 37 per cent said they did not want to buy while prices are expected to fall further and 36 per cent said they were worried about the rising cost of living.

Figures from the Office For National Statistics show the consumer price index (CPI) is now rising at 4.4 per cent, dramatically increasing the cost of living.

“Almost one in four buyers think they might struggle to get a mortgage, however just one in fifty has actually given up on their purchase due to failing to find a suitable loan,” continued Mr van der Heijden.

“Anyone keen to buy a home still has an extensive range of mortgage options.”