CASE STUDY: The businessman

Small business owners such as Mark Giles, from Basildon, Essex, are struggling as banks remain reluctant to provide funding.

Mr Giles, owner of Abby Couriers, a delivery company, said that he was finding it difficult to obtain credit, despite government calls for banks to boost lending.

He said: “I am trying to get my overdraft extended but Barclays is making it rather difficult. It says I have to secure the overdraft against my property. I have been running the business for 15 years and my credit record is spotless - I've never missed a payment.”

Mr Giles, 42, needs extra funding in order to pay a VAT bill. “I only need the credit for about three weeks and then it would be paid off,” he said. Mr Giles added that many companies were delaying payments. “One recently wrote to us stating that payments would now be made after 60 days, rather than 30.”

CASE STUDY: The first-time buyer

Despite a steep drop in the official Bank of England base rate, best- buy mortgage rates remain as high as 5 per cent and, unless a borrower can find at least a 25 per cent deposit, access to the cheapest deals is restricted.

Richard Ashton, a prospective first-time buyer, does not have a hope of getting on the housing ladder. Mr Ashton, 24, an IT recruitment consultant who moved to London eight months ago to take up an £18,000-a-year post, said that the expense of renting and crippling student debts meant that he could not save up enough for a deposit.

On his starter salary he already struggles to afford “killer” London rents, and is currently living in his uncle's house to keep costs down.

He said: “I don't imagine being able to afford a place for at least five more years. No matter how low house prices go, I cannot consider getting a mortgage.”

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