Mortgage approvals halved in 2008
The number of mortgages approved in 2008 was only 48% of the value for 2007, while numbers have actually risen in the last month or so the number is dramatically down on 2007.
What factors are causing this fall:
Less month in the economy
Falling property prices
Less money to be lent by finance industry
Unemployment rising.
What is being done to address this trend:
Bank of England lower mortgage rate to record levels
Stamp duty laws changed.
Government pledge to build more new housing than ever.
Government want to force lenders to lend even if the terms wont be attractive to them.
If you saw the BBC2 show on the great US stock crash of the 1920s (which caused the Great Depression) you will see the parallels. Leader overlooks sharp trading by the finance industry while economy grows, ignores warning signs and warnings from senior industry figures. Initially tries to inject money to stablise situation than backtracks, Hoover the President was voted out resoundingly afterwords and you woiuld not bet on the same to happen to Gordon brown. The parallels dont stop there, the US government under Hoover encouraged people to invest heavily in the American Boom and the Global Economy while insiders made decisions that affected the very nation. Stock market bonds were bought up at 25% of the face value, with the holder borrowing the rest. When stocks fell, traders call in the remaining cash bankrupting the stock holders. Big companies, traders and finance insiders all made huge amounts of cash leaving the average Joe owing 75% of nothing. Anyone who currently has negative equity on their property will know the feeling!!