Mortgage borrowing was harder over the last three months as banks made securing a loan harder, according to new Bank of England figures.
The UK central bank's credit condition survey revealed availability of secured credit and mortgages to households was "reduced materially" over the last three months.
Banks and building societies were found to be "reducing their risk appetite and targeting a slightly lower market share".
Borrowing was made tougher through lenders tightening criteria and cutting the amounts that could be borrowed against the value of a property.
The survey of lending also points to mortgage borrowing becoming tougher in the coming quarter but demand for remortgage products will increase as over a million homeowners will come to the end of their fixed rate deals and find interest rates much higher.
"The Bank of England credit conditions survey for the fourth quarter indicated lending to households had tightened and become more expensive," said Howard Archer, chief UK economist at analysts Global Insight.
Furthermore, the availability of credit for households was expected to diminish further over the first quarter of 2008, which will add to the growing downward pressures on consumer spending.