Home loan application approval rates have reached the lowest level for over a decade. The root cause of this is seen to be the "credit crunch" phenomenon being experience in the UK as financial lenders are finding it more difficult to source funding to offer financial loans to home owners.

Mortgage lenders are understandably cautious when it comes to home loan approvals despite the fact that many banking institutions are in fact in a position to continue lending to consumers. Even reliable borrowers are experiencing difficulties when remortgaging their properties in addition to the struggle faced by first time buyers to gain the magical approval that sees them getting onto the housing ladder. Customers with fixed rate mortgages are in the best position to ride the storm of this economic slowdown.

Approximately 55,000 mortgage applications were approved in July 2008, continuing a successive series of months of decline. The approval rate this time last year saw the number of approved mortgages almost double this at around 100,000 at the same time in 2007.

Where the ability to buy property across differing social classes is not so clear-cut, mortgage applicants with bad credit histories are finding it almost impossible to get financed now during the credit crunch for home loans. Given the sub-prime mortgage crisis in the states is seen as the cause for the cross Atlantic housing crisis, the blocking of lending to bad credit mortgage applicants should be a surprise to nobody.

Sub-prime mortgage lending in the states is being blamed by the media for bringing the global credit market grinding to a halt bringing with it fears of medium term recession. As customers of these products begin to fall behind on their mortgage payments and repossessions begin to spiral upwards, wider markets in the financial sector begin to dry up too. Poor lending decisions in recent times by banks to the sub-prime mortgage sector start to have a real effect on their own balance sheet and smaller banks either fail themselves or are taken over by more powerful banks, this is happing in both the UK and the USA.

Now that markets have started to decline, energy costs have increased putting extra financial pressure on people, spending falls and people start to worry. Governments are desperately trying to seek ways to rebalance the market and spur on demand. Just this week the Labour government set a 0% stamp duty on property sales with a value less than £175,000, many in the media think this is too little too late.

People looking to sell their home to move to bigger properties may now find that remortgaging will take longer than they thought, however many think that this economic downturn will begin to reverse in around one year so homeowners should start to contact their mortgage brokers for the latest news on the market. Mortgage brokers have access to a wide range of lenders and have special software that will enable them to tailor match the right financial product to your particular financial needs.