The Bank of England slashed the interest rates to one-and-a-half per cent but Stephen Ward, who runs BusinessGiftUK, says that only deals with part of the problem.

He said: "The interest rate cuts can help restore confidence in the economy, but will take time to have an effect.

"Until the banks combine cuts in mortgage interest rates with household loans back around 90 per cent or more of the value of the property, then many first-time buyers are still excluded if they do not have a large deposit.

"Without these buyers, the market remains uncertain, property values remain unstable and banks are therefore reluctant to take smaller deposits.

"Banks are compounding the problems created by more than a decade of overlending, by now not lending enough to provide a firm footing for recovery.

"Sadly the lenders seem to be letting the threat of short term losses from repossessions outway the profits to be made from prudent longer term lending.

"As a result the housing market is stuck, building trade is halted and most other industries are feeling the knock-on effects."

Mr Ward's business has been producing promotional print, business gifts and incentives since 1985, and he said he'd like to see more done to cut red tape.