Britain's lenders are now dropping their rates, providing buyers with new signs that conditions are improving in the mortgage market.

According to new research carried out by the Times newspaper, some of Britain's top lenders such as the Britannia building society are making more reductions on their rates, dropping its rates by 0.2% for buyers who have deposits of 10% or more .

Elsewhere, Halifax have reduced rates of 31 of their mortgage deals, with up to 0.4% off for those with 10% deposits and announced new competitive rates for borrowers with at least a 40 per cent deposit, providing rates from 5.59% and more for those with larger deposits. Intelligent Finance and BM Solutions owned by HBOS, have cut some of its mortgages by as much as 0.6%, and Woolwich, has cut loans for borrowers with a deposit of 40% or more by 0.38%.

Melanie Bien, of Savills Private Finance, told the newspaper that lenders were still being cautious about who they lend to, as the credit crunch continues to affect the British economy. "It is still the case that the higher the deposit or level of equity you have - and in many cases, you now need 40 per cent or more - the better the rate you are likely to get. Ms Bien then went on to say “Rates have been falling but criteria is generally still not easing. Lenders have been checking credit histories and favouring only those with the cleanest record. Caution still remains in the market."

The number of lenders offering home loans to borrowers with bad credit scores has significantly fallen in the last 12 months.

People are now being forced to save, giving them a chance of getting a good deal through providing a large deposit on a house. An effective method for saving is to open up high interest savings accounts to help your savings flourish.