Lenders may “pull in their horns” over Eurozone crisis

Boulger said: “There’s still a lot of uncertainty and the risk therefore is that, at some stage over the next year or so, there will be problems in the banking system which will result in mortgage lenders having to pull in their horns.”

Today eurozone leaders agreed a €109bn aid package to Greece which includes aid contributions from private lenders. Bank shares rose in response to the news with eurozone leaders hailing the comprehensive agreement.

However the Fitch ratings agency said it would consider Greece in “restricted default”.

Earlier this week, Deputy Prime Minister Nick Clegg said he had fears over the economic crisis in the Greek, Spanish and Italian spreading to Britain.

On the BBC's Andrew Marr Show last weekend, Clegg was asked: "How worried are you that we are on the edge of another really serious world financial crisis?"

He replied: “I'm incredibly worried. I think the gravity of the uncertainty in the United States, which is basically a product of political gridlock, and the growing fiscal crisis, sovereign debt crisis in the eurozone is immensely serious.”

However after the Greek bailout today, Boulger said: “On the basis that the market reacted positively to this briefly, it doesn’t look as if the banks are going to, in the short-term, see a problem in the wholesale markets. The biggest worry I see for the UK mortgage market is that there is a partial freezing or the wholesale markets along the lines of what happened when Lehman’s went bust.

“The biggest difference of course is that when Lehman’s went bust it was a shock. I expected the state to bailout Lehman’s and I think most people did. That all happened very quickly. We’ve known about the Greece problems for a long time so we’ve had awhile to prepare for it, therefore Greece defaulting in itself is not likely in itself to have remotely as bad a consequence as Lehman’s did.

“What however could cause a major problem is if the contagion spreads. The real question is, how much contagion will there be if Greece defaults? And that’s a difficult one to answer. If it spreads to Italy which is probably where it will go before Spain, that presents a real problem.

“But Ireland, for the UK, would be a big problem because although the UK banks don’t have as much exposure to Greece, we are heavily exposed to Ireland. If Ireland is brought down that would definitely cause some problems for UK banks.

“What we have seen in the last few months in terms of mortgages become a bit easier, much more appetite for the higher loan to values that would reverse if we get a serious banking crisis. It’s difficult to know what the chance of that is and it’s a possibility one will have to seriously consider.

“The only plus point is that because we’ve been expecting this for some time, it does give time for banks to plan for it which clearly means the impact is likely to be not as bad as it would’ve been if it had come as an overnight shock .”