Conveyancing solicitors and their clients will be concerned that the availability of home loans may reduce with the ending of the Special Liquidity Scheme (SLS), which is a Bank of England scheme enabling banks and building societies to lend each other money with the guarantee of Government support.

The Governor of the Bank of England, Mervyn King, has announced that the three-year scheme will not be extended when it ends in early 2011. The funds have helped bridge a £300billion mortgage funding gap which has arisen as a result of the banking crisis.

Lenders are expected to be under pressure to find new sources of funds to repay finance streamed from the SLS, which could cause stresses on the availability of money for mortgages.

A spokesman for the Council of Mortgage Lenders said, "The mortgage market will have to shrink unless lenders are able to raise funds from other sources."

It was estimated that nine years' worth of deposits from bank and building society savers would be needed to fill the home loans gap left by the ending of the SLS.

Even if alternative finance was found, costs to the home lenders were likely to increase and, if there was rationing of mortgages, first-time buyers would be the ones to feel the pinch with the likely knock-on effect of stalling property transactions and reducing the number of homes coming onto the market again.