There is way too much garbage in the media at the moment about mortgage lending freezing up or a mortgage lending log jam.
there is plenty of mortgage money out there for the lenders to lend. Another short history again below.
10 years ago a borrower needed at least a 5% deposit, proof of their income and proof of repayment method. The borrowing limit was 2.5 times joint income. A 2 year fixed rate was 6.5% with a booking fee of £299
Today a borrower needs a 10% deposit, proof of their income and proof of repayment method. The borrowing allowed is 4.25 joint income. A 2 year fixed rate is 6.2% with a fee of £599.
So over the 10 years a larger deposit is now needed, although you can still borrow more historically and at a lower rate than 10 years ago.
So why the fuss?
Because under Gordon Brown's watch the lenders changed their lending criteria to a much more loose lending policy. Between 2000 and August 2007 a borrower needed no deposit, no proof of their income, no proof of their repayment method, 6 times joint income on a 2 year fixed rate of 4% with a £149 booking fee.
This had the effect of pushing up house prices to way above their fair value. Now lenders have stopped their loose lending, a massive number of borrowers do not fit the criteria for lending, either because the lenders will not lend them enough, they cannot prove their income or they do not have a deposit.
House prices will now fall no matter what is done.