The increase in mortgage lending by the major banks over the past couple of years is not likely to continue, as the banks balance higher demand for funds from business in a market where funding is still tight and expensive.Releasing the latest JP Morgan and Fujitsu Australian Mortgage Industry Report yesterday, JP Morgan banking analyst Scott Manning said the supply of mortgage finance would be constrained, with growth in housing finance remaining in the high single digits in the current year.Manning said the increase in major bank mortgage market share over the past couple of years, which had grown from 65 to 76 per cent, had brought with it a $20 billion increase in the majors' wholesale funding requirement.He said the big banks had a record high allocation to mortgages, at more than 60 per cent of total lending for Westpac and Commonwealth and more than 50 per cent for ANZ and National Australia Bank. They would not be looking to increase that further.At the same time economic improvement was prompting renewed demand for funds from business, which the banks would seek to meet.Manning said: "While the demand for housing credit is unlikely to abate, the Australian major banks will look to achieve the best possible returns on the increasingly scarce wholesale funding they are able to achieve."He said there was already evidence that lenders were "tweaking" their mortgage businesses, imposing lower loan to valuation ratios on first home buyers, being more selective about who gets a rate discount and targeting multi-product sales ahead of mortgage-only business.