The Crosby Review, which is being carried out by former Halifax Bank of Scotland Group chief Sir James Crosby, said the log-jam in home loan funding would continue for some months yet.
He said funding of home loans should be left to the market – urging the Government and the Bank of England to steer clear of propping up the mortgage market..
Sir James, who was appointed by the Chancellor, Alistair Darling, to lead the review in April, concluded that Britain should avoid US-style government-backed agencies to tackle the funding crisis.
But the independent report stopped short of making recommendations for tackling the problems caused by the credit crunch.
Banks and building societies will have to wait for the second report in the autumn for his final conclusions.
The Council of Mortgage Lenders said earlier this month that the Government must “act swiftly” to resolve the current mortgage drought.
It warned that mortgage lending was set to halve this year – with the lack of financing hitting the UK property market and housebuilders.
Lenders have been lobbying Mr Darling for the scope of the Bank of England’s £50bn special liquidity scheme to be widened to allow banks to trade in securities backed by new mortgages in return for more easily tradable Government bills.