Mortgage approvals have hit an all-time low.

The Bank of England yesterday said there were just 36,000 loans arranged for people moving house last month, 12% fewer than in May and 68% less than in June 2007.

The figures, the lowest since records began, were published just as a government-commissioned report warned that it will take the housing market two to three years to bounce back from the credit crunch.

One major firm of analysts last night said the housing market was being "throttled" by difficulties obtaining home loans, even for those who can afford them.

Another said it believed British house prices would fall an average of 20% this year. Scotland, however, has seen less dramatic falls than the rest of the UK.

The Bank of England said the number of loans for people remortgaging or buying to let were also down and that the total amount of money extended to borrowers was just £3.1bn, 69% less than in June 2007 and the lowest figure for eight years.

The figures are even worse than most economists had expected. The mortgage drought, experts said, is exacerbating the housing market downturn as potential buyers struggle to raise the finance they need, making it difficult for people to get on to or trade up the property ladder even as prices fall.

Howard Archer, chief UK and European economist at Global Insight, said the figures were: "Yet more very disturbing mortgage data that heightens concerns over the potential depth and length of the housing market correction.

"The Bank of England data graphically highlights that housing market activity continues to be throttled by stretched affordability and tight lending conditions."

Homes for Scotland, the body that represents housebuilders, yesterday called on the Scottish Government to come up with an emergency support package for the industry, which has already shed a reported 15,000 workers and seen new build starts drop 46% in the last quarter.

Its chief executive, Johnathan Fair, said: "We are now facing job losses within home building that are already more than 10 times the level seen at Ravenscraig, with the impact being felt the length and breadth of the country.

"Scotland may still have the most resilient housing market in the UK but significant investment of new money, from within the Housing Budget or elsewhere, is urgently needed."

The current problems are being felt particularly keenly by building societies, which saw outstanding mortgage debt fall by £526m in June - the first time that consumers have repaid more than they borrowed since its current records began.

Sir James Crosby, a former head of Halifax Bank of Scotland, in a report commissioned by the government, made a bleak forecast of a two to three-year logjam for the mortgage business. But he mooted the idea of further temporary support from the government to help stimulate the mortgage-backed securities market.

Some observers speculated yesterday that the state may effectively have to guarantee mortgages, a move that would spark massive controversy.

Nationwide, one of Britain's biggest lenders, is expected to report further declines in house prices later today. The current financial crisis hitting Scotland and the rest of the UK began in America last year. US house prices have since collapsed, by 16.9% from May 2007 to May 2008. Homes in Detroit are now worth less than they were at the turn of the millennium.