A report by business analyst Datamonitor claims the main factor holding back growth is the availability of finance, even though consumer demand is also low. Due to the banking crisis, Banks are now required to keep more funds in reserve, thereby reducing the supply of net credit available.
They believe it will be tough to obtain a mortgage throughout 2011. They also believe it could be until 2014 before it becomes easier to get a mortgage.
Mortgage lending in 2010 was £136bn, and it looks certain there will only be small growth in this, upto £138bn in 2011.
"It is now debatable whether this market will ever attain the heights it reached between 2005 and 2007," said analyst Daoud Fakhri from Datamonitor
"The market has a long way to go, as the initial feeling in 2010 was that gross lending would grow to around £150bn, but instead it fell. In total, between the height of the market in 2007 and 2010 gross lending fell by more than 60%. We now predict that the market won't reach £150bn until 2013 at the earliest, with significant growth in 2014 when we expect it to reach £170bn."