There has been more bad news for the housing market, with problems in credit markets getting worse rather than better.

In the UK, Bradford & Bingley has needed a government buy out. This will make the government the second biggest mortgage lender. When the dust has settled the UK banking sector will be much more highly concentrated leading to less choice for consumers.

The withdrawal of Bradford & Bingley will reduce the choice of mortgages, especially for buy to let landlords. This continued shortage of mortgages will cause further downward pressure on house prices in the short run.

On the economic front, the UK is facing a serious downturn due to a combination of problems in housing market, global economy and falling confidence - UK facing recession