HarryM - 5:26 pm on Dec 1, 2007 (gmt 0)

I don't think that the UK has anything like the bad-mortgage problems of the US right now.

I agree. The problem has come about because financial institutions have bundled sub-prime loans with prime loans and then sold them on. The buyers of these products have now become aware of this and realize they don't know what risks they are exposed to. It will probably take years to unscramble the mess. In the mean time the media is spreading doom and gloom and house buyers are naturally nervous.

But there is no real problem, at least in the UK. Sub-prime loans are always riskier, but the lenders charge a higher interest rate to protect themselves.