From 2014, lenders will need to consider a borrower's income and outgoings and interest-only mortgages will only be offered to people with a firm repayment plan, rather than relying on hopes that house prices will rise.
They will also have to factor in the impact that future interest rate increases could have on repayment costs.
The new rules will affect the nine million UK households which have a mortgage as well as many people in the rental sector who are already struggling to buy a home.
The FSA insisted its rules would not stop lenders being able to offer low-deposit mortgages to first-time buyers and there would be no upper age limits imposed.
Toughened mortgage lending rules to make sure borrowers can only take out deals they can afford and prevent any return to irresponsible lending have been outlined by the financial services regulator.
The shake-up, which comes into force in April 2014, is the result of a long-running review by the Financial Services Authority (FSA), aiming to put "common-sense" at the heart of the market.
The FSA also announced a new rule which takes effect from today, stating that lenders must not take advantage of a borrower who cannot get a mortgage elsewhere by treating them less favourably than other similar customers, for example by offering them a worse interest rate or terms.
It said this would help protect people who were already stuck with their current lenders, as well as those who may become trapped when the new rules came in.
While demand among buyers has fallen for the last four months, September registered the largest fall, with a 3.6% decrease, compared with a smaller 0.9% drop in the volume of new properties coming to market, the study said.
The legacy of summer, which saw a slowdown in demand driven by seasonal factors compounded by the Olympics, has continued into September.
This has added further to low consumer confidence which has been a feature of the housing market for some considerable time.
– Richard Donnell, director of research at Hometrack
A Bank of England survey of lenders found last week that a recently launched £80 billion Funding for Lending scheme to boost lending to households and businesses has helped to increase mortgage availability.
Richard Donnell, director of research at Hometrack, said: "While the Government's Funding for Lending scheme is likely to support a modest increase in mortgage lending, the uncertain economic outlook, together with affordability pressures, will continue to act as a drag on housing market activity.
"Pricing will remain under slow, downward pressure but the tightening of supply will limit the scale of price falls in the short term."
The latest figures are a sharp contrast to the start of the year, when between February and May buyer demand increased by 25%.
No region across England and Wales saw house prices increase in September, and the North West saw the biggest fall, with a 0.3% drop.
Prices remained static in London and the South West, fell by 0.1% in the East Midlands, the North East and the South East, and dropped by 0.2% in East Anglia, the West Midlands, Yorkshire and Humberside and Wales.