With effect from Tuesday 16th September, Woolwich, part of Barclays are cutting rates on their fixed and lifetime tracker mortgages, and introducing a competitive new lending tier at 75% loan to value.

This comes within the week where the two largest US Mortgage providers have received financial help from the US government after falling into difficulties.

Ten of the 12 largest mortgage lenders have introduced mortgage rates cuts in the past few weeks in a bid to gain a market share of the mortgage market that is in virtual free fall.

The Nationwide Building Society say that house prices may fall by up to 25% from their peak last autumn with no likely recovery in the housing market until 2010 even though the cost of borrowing has in fact been coming down in the past couple of months.

According to The Royal Institution of Chartered Surveyors (Rics) house sales are at their lowest level since 1978, the year they started the monthly survey. The level of sales is so bad that some estate agents are only selling one house a week on average, a drop of 47% on last August.

A spokesman for Rics said “A lack of mortgage liquidity is the key issue which is keeping the housing market from showing any real sign of recovery.”