An economic recovery is at least two years away – according to a Bradford building society boss.

Iain Cornish, chief executive of the Yorkshire Building Society, also expects house prices to fall a further 15 per cent this year.

He told the Bradford Property Forum that in the residential market the tough conditions showed no sign of lifting.

He was speaking as it was revealed UK gross mortgage lending fell by 30 per cent in 2008 from £363.7 billion to £256.4 billion, with December’s figure of £12.6 billion the lowest monthly total since 2001.

Mr Cornish said the speed and level of decline in prices since 2007 had been more severe than in the previous housing market recession of the late 1980s and early 1990s. With unemployment increasing, mortgage len-ders were seeing higher levels of arrears as well.

Mr Cornish said banks and building societies were being pulled in two directions, with the Government wanting them to lend more and the Financial Services Authority urging them not to.

Mr Cornish also revealed the Yorkshire would not participate in the Government’s latest scheme to promote shared ownership of homes. The society had enthusiastically supported an earlier scheme which had been withdrawn at short notice.

Mr Cornish said: “After that experience we have learned to study the small print of any government scheme in great detail to see if it would make a difference. Such schemes involve a lot of spin but don’t always make a difference.”

Mr Cornish did, however, defend the Government’s bailout of the banks.