First time buyers are being urged to wait out the mortgage mess. The markets should settle down before customers consider getting a mortgage, experts say.

100% mortgages are no longer an option and a number of banks, including The Co-op Bank and First Direct are choosing to temporarily suspend availability of their home loans. Claire Frances of Moneysupermarket .com says: "Consumers looking for a mortgage are facing less choice and higher rates. The Bank of England has warned that the situation is likely to get worse before it gets better and that the squeeze on mortgages is likely to continue for the next few months at least."

Large mortgage providers such as Halifax, Abbey and Nationwide have all increased rates on their mortgages. The result of these higher rates is that the deals no longer look competitive and it is as though the banks are pricing themselves out of the market. The reason that banks might want to deter custom at this turbulent time is because many banks are trying to control their bad assets and they cannot afford to take on any more debt.

Louise Cuming is the head of mortgage services at moneysupermarket.com , and she has said: "It's getting very difficult out there because as leading rates are pulled, the lenders offering the next best deals know that their products will be propelled into the best buy tables and that this will result in a huge influx of applications - if they don't want, or can't cope, with that level of business they too are having to re-price their mortgage products."

While some banks are seemingly trying to deflect custom, Alliance and Leicester seem to be trying to attract it. Today news broke that they have launched a number of new mortgages and buy-to-let deals. Speaking to Introducer Today, the head of mortgages at Alliance & Leicester, Richard Taylor said: "This new range of mortgage products continue to present a good choice of residential and buy-to-let products with customers being offered a choice of rates, product fees and the term they would like their mortgage to run." How long Alliance and Leicester can offer their new deals in this economic climate remains to be seen. Alliance and Leicester are also one of a many banks which now require a minimum deposit of 10% on all their deals. Other banks which need at least a 10% deposit include, Britannia and Cheltenham and Gloucester.

Moneysupermarket's Claire Frances says: "The number of mortgage products available has plummeted from around 15,500 last July to around 5,300 now. And with many lenders pricing their products at uncompetitive levels, the few deals that are keenly priced are attracting huge swathes of money and consequently aren't staying around for long."

Negative equity is also tipped to be a serious problem for existing home owners as house prices are falling and are likely to have fallen by as much as 5.8 % by the end of the year. But the relief which falling house prices has the potential for offering first-time buyers is overshadowed by the low likelihood of them getting a good mortgage deal before the year is out.

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