The credit crunch has made the adverse credit mortgage market tighter but predicted interest rate cuts could offer borrowers some hope, it has been suggested.

Sarah Robson, press officer for the Council of Mortgage Lenders, explained that recent turmoil on world financial markets had made it "more difficult" for those with imperfect credit histories to take out a mortgage as "lenders are tightening their criteria".

However, with speculation that the Bank of England intends to cut the base rate from its current level of 5.75 per cent at some point in 2008, borrowers could find it a little easier to secure funding for a house purchase.

"The general expectation at the moment is that there will be a reduction in interest rates next year," Ms Robson said.

"That will ease the pressure on some borrowers… it does give some borrowers hope," she added.

Sub-prime mortgage lending has been cited as one of the principal causes behind the credit crunch, which originated in the US, and now there are signs that the UK market is also showing signs of a downturn.

Last week, Kensington Mortgages withdrew its range of adverse credit products and said it would focus on less risky products until economic conditions improve.