A decline in first-time buyers affects the entire housing market, Moneywise has warned.

According to Rebecca Atkinson, news editor of the personal finance magazine, for homeowners looking to sell a small property, a lack of first-time buyers is going to make it difficult to move up the housing ladder.

Falling numbers of first-time buyers reflects a lack of confidence in the market, she stated, adding that although on the decline, there is still some demand for new mortgages.

First Direct recently announced that it is suspending its mortgage services after receiving five times the normal volume of applicants.

Ms Atkinson claimed the suspension is more to do with the firm seeking "good quality customers" than large volumes of business.

She explained: "The reason they have a problem shows the wider impact of the credit crunch.

"It's not just about the liquidity crisis, it's also about this idea of not wanting to take every single bit of business that comes their way."

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