London (shakespearefinance) April 8, 2008: The home that many people dream may not be easily accessible to them for some more time to come, owing to the tight availability of home loans in the money market.

The Bank of England warned that the squeeze on the availability of loans for buying a home is likely to continue over the next three months. The Bank was also of the view that numbers of default by the homeowners may increase. BoE's Credit Conditions Survey confirmed that the availability of credit for home purchases reduced in the three months to mid-March and that there was further reduction expected over the next three months. The findings of the Bank of England has increased the chances for a base rate reduction in the next meeting of the Monetary Policy Committee.

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, said: “This supports the case for the Bank of England taking further action. It is conceivable that they may cut interest rates again next week. If not, it is almost a certainty that rates will cut to 4.5% by the summer.

The mortgage lenders are less likely to lend to each other amid the credit crisis, further making the mortgage availability scarce for the home purchasers.