The UK mortgage market has literally imploded. In June, banks approved just 38 thousand mortgages, compared to 144 thousand during the same month the previous year. That is a fall of almost 70 percent.
The banks are blaming a "lack of funding" but what does that mean? Why won't banks lend to each other? Why won't investors buy mortgage backed securities? Could it be that everyone now fully understands that the UK housing market is horrifically overvalued, that current home debtors have a high probability of default and that funding mortgages today is simply too risky?