HSBC has revealed it is buyer confidence, rather than finance that is stalling the UK housing market.

New research from the bank has found that 98% of potential housebuyers have no problem arranging a mortgage, but people expect house prices to fall further and are not confident in their ability to fund a new property as the cost of living, including mortgages rises.

HSBC's study found that one in 10 Britons are keen to move house or get on the housing ladder, but have decided hold off for at least six months. Of these, just 2% said they had difficultly getting a mortgage, but 37% said they did not want to buy while prices are expected to fall further.

Martijn van der Heijden, UK head of mortgages for HSBC, says: "There is a perception at present that banks are not offering mortgages. In fact, our latest study suggests that access to finance is not a major issue. Instead, many buyers are taking a wait and see attitude, naturally some feel uncomfortable buying a home which may be worth less in six month's time.

"Almost one in four buyers think they might struggle to get a mortgage, however just one in fifty has actually given up on their purchase due to failing to find a suitable loan. Anyone keen to buy a home still has an extensive range of mortgage options.”

This news comes as the National Association of Estate Agents revealed quarter of UK estate agents say the Chancellor’s indecision regarding stamp duty has led to sales falling through.

A poll of more than 1000 estate agents found that the recent stamp duty issue has affected the property market.

The poll revealed 25% of agents now claim that a sale has fallen through as a direct result of the Chancellor’s comments. Whilst 92% of agents says the Chancellors remarks have increased consumers concerns.

The Chancellor Alistair Darling recently hinted at a possible stamp duty holiday to revive the UK housing market. The treasury then retracted the statement, which was then reiterated once again by housing minister Caroline Flint.

Peter Bolton King, chief executive of the NAEA, says: "Instead of the Government formulating a careful plan outlining their thoughts clearly and concisely with a clear time frame in mind, this comment was simply made off-the-cuff.

“Consumers need reassurance - clear and immediate decisions in this area need to be made. Sometime in Autumn is not good enough. The Government need to clear up this uncertainty as soon as possible to help minimise the disruption to the market place and help the British economy move forward. We would welcome the opportunity to meet with the Treasury to try and help overcome this problem."

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The Government’s financial watchdog, the Financial Services Authority, has demanded mortgage lenders must ensure they are treating sub prime customers fairly

In the current market conditions, the FSA says there is still work to be done with mortgage lenders when it comes to handling arrears and repossessions.

This warning comes as new data on mortgage lending from the FSA shows that the number of consumers facing arrears and repossessions is increasing.

In dealing with customers in arrears, the FSA is urging mortgage firms to be flexible, to make sure they consider customers' individual circumstances and to use court action as a last resort.

Lesley Titcomb, director responsible for the mortgage sector at the FSA, says:
"As our data shows in these current market conditions more people are struggling to meet their mortgage payments and it is vital that firms treat them fairly. This means paying attention to their individual circumstances and not repossessing their homes when there may be an alternative solution. Repossession has to be the last resort."

There were particular concerns with specialist sub prime lenders that operated a ‘one size fits all' approach, focused too strongly on recovering arrears without reference to the borrower's circumstances.

The FSA also found that they were too ready to take court action; and
had lower standards of systems and controls in place to control mortgage arrears handling, including training & competency arrangements.

Sue Edwards, head of consumer policy at Citizens Advice, says: "Our 2007 evidence report showed that in some cases lenders have taken borrowers to court without exploring all the other options available to address the arrears resulting in excessive costs, stress and worry for borrowers. We also see cases where it appears that the lender had taken little or no account of the borrower's ability to repay the mortgage. The borrowers got into mortgage arrears and faced repossession.”

The CAB says that it dealt with over 57,000 problems about mortgage and secured loan arrears last year, an 11% increase on the previous year and these problems rose by 35% in the first two months of 2008 compared with the same period in 2007.

Peter Williams, executive director of the Intermediary Mortgage Lenders’ Association, says: "We strongly contests the suggestion made by the FSA that all specialist lenders systemically operate a ‘one size fits all' approach to arrears management.

“Our members ensure borrowers in distress are treated as individuals and that even in the worst case scenario of possession, the borrower is given the best advice and assistance. Keeping people in their homes is always preferable in a market such as this.

“By repossessing assets and selling them at a discount to their book value because of falling house prices, lenders could crystallise their losses. In some situations, however, delaying an inevitable sale of the property means the debt will continue to rise with no realistic chance of the borrower ever clearing it.”

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The Office of Fair Trading has begun to look at irresponsible lending in UK consumer credit sector.

This comes as over a quarter of Brits blame banks for today's financial mess - almost everyone says they have had their credit limits raised without even being asked, according to fool.co.uk.

Although it is lenders who have been the instigators of the credit crunch, consumers believe society is as much to blame as the Government or the banks. The website says one in five people place responsibility squarely on the shoulders of the Government.

One in four Brits blame themselves, and another one in four reckon consumer culture is culpable. They believe our quick-fix shopping culture has forced people to take on unnecessary debt.

According to the Bank of England, fresh mortgage approvals has slumped 70%. It is down from £17 billion a year ago to £5 billion in June. Meanwhile, total lending over the same period has halved from £31.7 billion to £16.8 billion.

Fool.co.uk has revealed that the investigation by the Government couldn’t come sooner - one in nine people were given credit even though they had a bad credit rating. Elsewhere, almost half say they have been offered credit they knew they couldn't repay.

Despite pointing the finger at banks and their irresponsible lending, three out of four admit that they don't read the small print when signing credit agreements. Furthermore, half claim to have used one form of credit to pay off another.

David Kuo, head of personal finance at Fool.co.uk, says: "Both the banks and the Government have to take equal responsibility for the credit crunch - banks for peddling unaffordable loans and the Government for lulling people into believing that there would be no return to boom and bust.”

The OFT's irresponsible lending project will involve wide consultation with business, consumer groups and other stakeholders. One of the key outcomes of the project is expected to be clear guidance on lending behaviours and practices which the OFT considers to be irresponsible.

Ray Watson, director of consumer credit at the OFT, says: ”Credit is an important part of everyday life so it is vitally important that consumers are safeguarded from irresponsible lending and that businesses have clarity about what this constitutes.”

Financial education charity the IFS School of Finance has warned that things will not get any better for consumers whilst so many people lack basic skills in personal financial management.

Phil Hall, head of public affairs at IFS School of Finance, says: "Levels of consumer debt have been at dizzying heights for several years, causing many to face insolvency.

“By equipping the public with the skills, knowledge and confidence to manage their finances effectively, the number of insolvencies would inevitably be reduced."

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Experts are predicting that the average house price in England is set to rise by 25% over the next five years.

According to a new report published by the National Housing Federation, average house prices in England will rocket to £274,700 by 2013, despite immediate fears of a housing market crash.

The association’s paper, entitled Home Truths 2008, says that house prices will continue to fall into 2010, but then increase by 5.2% in 2011, 9.2% in 2012, and then another 9.3% by 2013.

The report states that while demand is growing, this rapid house price rise will be attributed to the lack of supply of new housing, which is falling each year. The report also says that at least 223,300 households are expected to form each year to 2026, and expected to add further to housing demand.

David Orr, chief executive of the HBF, says: “Demand for housing is going up, while the supply of new homes is going down. This means that as soon as the economic outlook improves house prices will resume their previous upward trajectory.

“People are living longer, they’re delaying getting married and they’re more likely to get divorced – meaning we now have more households than ever.

“One in thirteen households is registered as being in housing need, with four million people now living in cramped or difficult conditions.”

Although prices are set to rise once more, right now they are still falling: the Land Registry says the average house prices in England and Wales fell 1% this June, taking the average price to £180,781.

It says annual house price growth is showing a decline for the tenth consecutive month, with an increase of 0.1%. It also says that during April 2008 the number of completed house sales fell by 39% to 57,831.

With the current falling prices, coupled with rising mortgage rates, more consumers are turning to independent financial advice as recession looms: according to Unbiased.co.uk's latest report, over 250,000 consumers requested details of independent financial advisers in the first half of 2008.

And as the UK economy wavers canny consumers have been seeking advice on personal retirement planning and mortgages, with equity release also an increasingly popular topic - over 30% of Unbiased’s searches for details of local IFAs requested advice on retirement planning. Also, more consumers are now asking for advice on whether to release equity from their homes.

Concerns over the housing market continue to prompt consumers to seek advice on mortgages: approximately 50,000 people requested a local adviser to help them on mortgages in the first half of 2008.

David Elms, chief executive of Unbiased.co.uk, says: "Our latest report demonstrates that when consumers are most worried about their finances, they put their faith in IFAs to guide them.

“Consumer needs are constantly changing and whole-of-market IFAs are the best-positioned of all advice types to serve these needs. It is also reassuring that with increased interest in equity release products, consumers are seeking the gold standard of advice in order to decide on whether such products are appropriate to them."

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Over a third of Britons would only last 11 days if they were ever made redundant.

New research from Yorkshire Building Society has revealed that the majority of Britons are living at a limit, with the average person having savings that would only last 52 days if they were unable to work.

And worryingly, nine out of ten of people have no personal income protection in place and if unable to work, 68% either do not know how they would survive or have unrealistic expectations of how they would continue to meet their daily expenditure.

36% of Brits would only be able to last 11 days, with less than £500 in accessible savings. The worst affected groups are women, divorcees, and those under 44 years old. The Society's analysis shows that the average monthly outgoings are £1,445 while the average accessible savings are £2,474.

Almost one in five of those asked said they would try and manage on state benefit allowances if they found themselves out of work. However, as average weekly outgoings of respondents equalled £333.56, this leaves a weekly shortfall of £258.16, as the current state benefit stands at only £75.40.

Yorkshire found that one in 20 of the respondents think they would look into selling their home if they needed to access money quickly. But the mutual says in a virtually stagnant housing market people cannot rely on being able to sell or rent their home in order to release the equity.

Tanya Jackson, corporate affairs manager at Yorkshire Building Society, says: "In the current economic climate this research paints an extremely alarming picture for those consumers without any protection products in place.

"It is extremely worrying to see that many Britons are ‘living on the edge' and we therefore urge consumers to take a look at their protection needs in order to assess how they would cope financially if they were taken ill and whether they would benefit from the security that a protection scheme provides."

These tight times are also reflected in some recent statistics from LV. It found that more and more families are choosing to stay in the UK for their summer holidays this year.

The insurer found that seven out of ten parents are concerned about their personal financial situation, and more than half of all adults are opting to stay in the UK for their holidays this year, citing the economic downturn for their British break.

Of course, the whole reason for the economic downturn in the UK began with the sub prime mortgage crisis in the USA, which led to a chain reaction round the world. The President of the United States tried to explain what had happened in the best way he could.

At a Republican fundraising meeting in Houston, Texas, George Bush told guests the reason for the crunch. He says: “There's no question about it. Wall Street got drunk - it got drunk and now it's got a hangover.

“The question is how long will it sober up and not try to do all these fancy financial instruments?”

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