Approvals for home loans in the UK have hit the lowest level ever recorded for a single month. The blame has been set squarely on the credit crunch as lenders are not only finding it difficult to obtain the funds to lend to home owners but they seem unwilling to lend the funds they do have available.

Only around sixty thousand mortgages were approved last month. This figure is lower than the previous month when a new record low was also set. It is also approximately half the number of home loans that were approved in the same month one year earlier. Statistics for mortgage approvals began in 1993 meaning that several years of a tough property market in the early 1990s is not included in the comparisons.

This information is indisputable evidence that the mortgage lending market is in dire straights. Lenders are being extremely cautious with regards to whom they approve home loans to regardless of the fact that many do have the funds to lend. High quality borrowers are finding it difficult to obtain loans in addition to the millions of home owners who previously secured adverse credit mortgages against their properties.

While there is no longer such a great divide between the poor and the slightly affluent when it comes to home finance, potential borrowers with credit impairments against their names are finding it virtually impossible to obtain finance. This is hardly surprising though as it is adverse credit mortgages which are largely to blame for the crisis in the first place - or rather the blame rests with the lenders who approved mortgages for them.

Adverse credit mortgages are known as sub-prime mortgages in the USA and are shouldering a large portion of the responsibility for bringing the global credit market to a standstill. When borrowers of such products began to default in large numbers the finance market began to shrivel up as if it were freezing to death. Lenders suddenly realised that they miscalculated the numbers of borrowers who would fall into delinquency and many didn't have the operational capacity to chase overdue payments.

Once the market began to decline, panic set in. Despite the fact that billions of pounds have been written off the loan books of some of the world's largest lenders there level of caution being shown at the moment is excessive. Emergency funding has been released by several Governments which means there should be enough funds available for lenders to begin to issue home loans more readily, even adverse credit mortgages.

However this is not the case and the market remains stagnant. There are some mortgage products available but they are difficult to obtain and sell out quickly. Borrowers of adverse credit mortgages who are looking to upgrade their home loan may have to wait a while longer for the market to sort itself out and become more open and willing to co-operate. In the meantime home owners will have to keep an eye on the market and continue to contact their mortgage brokers for the latest news.