Despite the fact that there are all manner of experts working on the problem, there does not seem to be any relief in sight for the current situation in the credit markets. This effect has reached into every aspect of the financial markets, including CCJ mortgages, making it difficult for homeowners to purchase what they need to provide for themselves.

With the markets in turmoil and credit difficult to achieve, it is easy to see that there is no end in sight of the difficulties associated with a turbulent market and the banking institutions that are in such disarray.

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David Porter, CEO of the Association of Electricity Producers, stated, “If you take money out of the companies, and they have to find it somewhere else, then their investment costs will go up and customers will have to bear the brunt of that. There is a serious risk that bills would go up.”

“Last year we made just a whisker under £500million in the UK. That doesn’t buy even one new power station,” an npower spokesperson said.

“It is our plan to spend more money than we earn in the UK for the next ten years. That is a big commitment and if there was a windfall tax that is the sort of commitment that would have to be re-evaluated.”

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Louise Cuming, the head of mortgages at Moneysupermarket.com said: “We are no way near the end of this - unemployment is rising and the cost of living is spiralling, which is hitting people’s confidence.

“Risk is tightening and all the best mortgage rates are only available to those with a large deposit. It is getting tougher for borrowers by the week.”

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Director general at the CML, Michael Coogan, said: “It is inevitable that more borrowers’ coping strategies will come under pressure in current conditions than in the usually benign years of the last decade. That’s why lenders, government and the advice sector are working closely together to minimise the impact on borrowers.”

“No-one wants to see a household lose their home, and repossession typically leads to a loss for the lender as well. The focus of lenders’ arrears management policies today is on seeking realistic alternatives that balance the interests of customer and lender. Anyone who thinks they may be heading towards financial problems should contact their lender to discuss their options – the earlier the better.”

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Sue Edwards Head of Consumer Policy at Citizens Advice said, “We call on the FSA to take urgent action on the findings of their research if the worst consequences of the deepening mortgage crisis are to be avoided. We believe this should involve strengthening the rules on mortgage arrears and lending practices.

“We also call on the government to introduce a mortgage pre-action protocol as soon as possible to ensure that lenders only take possession action as a last resort. In the meantime it is vital that lenders treat their customers fairly and sympathetically and consider alternative options to ensure that repossession really does become a last resort.”

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CML Director General Michael Coogan said: “The FSA rightly identifies that the best way to tackle mortgage fraud is for lenders and the regulator to work together, along with law enforcement agencies, to root out fraudsters.

“People may not think of lenders as victims of crime, but unless fraudsters are tackled then honest customers are the ones who end up paying more. We welcome the FSA’s focus and practical approach in this area, and we expect that even more lenders will now participate in the voluntary initiative designed to identify and investigate broker fraud.”

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“Many borrowers are just opting to slip onto their lender’s standard variable rate (SVR) rather than remortgage,” says Melanie Bien, of Savills Private Finance, the mortgage broker. “Banks are lowering their fixes in response to lower swaps, but they also need to improve market share,” Bien added. “But we are only seeing big players with money to lend doing this.”

“Alliance & Leicester, HBOS and Abbey have announced that they will be changing the terms of their lending to reflect rising household bills,” says Jonathan Cornell, of Hamptons Mortgages. “While it is sensible to factor in rising living costs when determining the amount of disposable income available to borrowers, this is going to freeze many prospective borrowers out of the market.”

Ray Boulger, at brokers John Charcol, said: “For the property market and mortgage brokers there is a silver lining to all the grim news on the economy. The likelihood of the Bank of England increasing base rates is receding, and the prospect of a rate cut is increasing. That has helped bring down the rates on the swaps market. “I think we will look back on July as the time when fixed-rate mortgages peaked.”

Melanie Bien, director of mortgage broker Savills Private Finance, said: “We’ve had some pretty encouraging news in recent days. Certainly more lenders are cutting rates than raising them. But I’m not sure we are going to see lenders cut their rates right across the board.”

Shadow Chancellor George Osborn commented, “These figures show that home ownership is being pushed beyond the reach of millions under Gordon Brown. This is yet another blow to people wanting to get a foot on the housing ladder. With living standards under threat from soaring prices, stagnant earnings and higher borrowing costs, millions of people are asking why Gordon Brown failed to prepare Britain to weather the economic challenges ahead.”

Liberal Democrat Treasury spokesman, Vince Cable, blames the BBA for the current problems, stating, “I wish the BBA, which is now facing up to reality, had been equally clear-headed several years ago when it was already becoming clear that reckless, indiscriminate lending was feeding an unsustainable boom in house prices. This was bound to come to a sticky end.”

CML director general, Michael Coogan commented: “Monthly house purchase lending volumes continue to be lower than last year’s levels and there will be a further weakening in coming months as recent approvals data has shown.

“The squeeze on mortgage funding has led many lenders to tighten their lending criteria. While tighter criteria make it more difficult for some borrowers to obtain a mortgage, they also reduce risk in a slower housing market. There has been a resurgence of fixed-rate lending as borrowers are seeking certainty. This trend is likely to continue as the anticipation of future Bank base rate cuts has diminished.”