MPs were also concerned that Rock was trying to attract new customers with offers above their homes’ worth, thereby running the risk of repossessions in the future.

This crisis doesn’t appear to be over for the Government as it would not deny claims that taxpayers face a £100mb bill for advice to be paid for from banks and lawyers during the quest for a buyer. Chief Secretary to the Treasury Yvette Cooper said: “I can't tell you what the figure is. But what I can tell you is that when a bank gets itself into trouble, inevitably there are fees and costs involved.”

As Chancellor Alistair Darling went into action in the Commons to push through emergency legislation to take Northern Rock into public ownership, he inevitably faced criticism from Conservative leader David Cameron who called for Mr Darling to be sacked. He said: “I think we have to ask ourselves, does this Chancellor have any credibility. Do people trust what he says?”

It was also, according to the Conservatives, amazing that Rock was still allowed to offer 125% mortgages, with a quarter of the debt unsecured. Rock’s interest rate on unsecured loans is 12.9%, whereas it is 13.1% at Halifax and 15.4% at NatWest.

Adrian Coles, of the Building Societies Association, felt that the assistance being given to Northern Rock by the taxpayer would 'lead to pressure being put on organisations that have not failed and do not need taxpayer support'.

CBI director general Richard Lambert, said: “It is critically important that state ownership of the bank should not be allowed to distort the savings market, through access to government funds on favourable terms.”

Prime Minister Gordon Brown re-iterated that nationalisation was a temporary measure. However, new Northern Rock boss Ron Sandler has stated that it will be 'some years' before the bank can repay its loan debts.

Lending increased to an estimated £26.5bn in January, an 11% increase on the £23.9bn figure for December. The figure was still lower than most other months of last year.

Despite the snippet of good news, the CML said that it was expecting lower lending volumes throughout 2008, driven mainly by remortgage loans.

January lending figures are usually lower than those for December, but the increase comes on the back of a very poor December for the housing market.

CML director general Michael Coogan said: "Gross lending held up well in January. However, there is considerable uncertainty in the housing market at the moment and we expect lending volumes to be lower in the coming months." His forecast is for remortgaging to be stronger than for new mortgages in the short term. He added: "Home buyers might be more inclined to transact if their moving costs were reduced and the government has the opportunity to address this by raising stamp duty thresholds and cutting the rates of stamp duty in next month's Budget."

Nearly all indicators recently have pointed to a downward trend in the housing market. The number of surveyors at the Royal Institution of Chartered Surveyors (RICS) reporting house price falls was up for the sixth month in a row in January; the Halifax and Nationwide house price surveys both showed falls in house price inflation.

The UK's biggest mortgage lender, the Halifax, said that annual house price inflation was 4.5% in January, down from the previous month's figure of 5.2%.

According to Nationwide figures the annual price growth rate dropped to 4.2% in January, which was the lowest rate since December 2005.

Research commissioned by financial website uSwitch.com reveals a distressing picture of problems for a large chunk of the population in the grip of money troubles. Around one in four have major concerns that their current borrowing levels are already out of control, or about to become so.

Around one in eight – 5.4 million – have missed a payment of a debt of a bill in the last six months, and one in ten have had a direct debit, payment or cheque bounce in the same time. Around 3% actually fear that they could lose their home.

The impact of the five interest rate rises between August 2006 and July 2007 have finally begun to have a damaging effect on people’s finances, with some £100 having been added to most monthly mortgage repayments, and all credit – loans, overdrafts, credit card rates – is higher than it was.

The situation has been made even worse by the global credit crunch, with banks and building societies pushing up mortgage rates even further, refusing more loan and card applications, and chasing more borrowers through the courts to pay their debts.

Further studies by Mintel and Moneynet.co.uk have backed up the findings of debt paralysis by uSwitch.com.

Britons now owe a staggering £1.3 trillion to financial institutions, with the average person seeing half of their take-home pay going on mortgage repayments and other debts.

Director of consumer policy at uSwitch, Ann Robinson, said: “This is crunch time for consumers and it couldn't come at a worse time of year. In the run-up to Christmas, traditionally one of the biggest periods of consumer spending, people are concerned about their jobs, their homes and their ongoing ability to manage their debts and bills. The days of easy credit and the ‘buy now, pay later’ culture may be numbered, but they will leave a painful reminder for those left struggling with debt. The credit crunch will claim casualties - it will be enough to tip some over-indebted households over the edge.”

The result of this was that Merrill posted its first quarterly loss for six years, and put Merrill at the top of the list of worst affected institutions from the subprime crisis and credit crunch.

Merrill said: “This is due to additional analysis and price verification ... including the use of more-conservative loss assumptions in valuing the underlying collateral.” It cast some doubts over chief executive Stan O’Neal’s handling of the crisis.

The season of third-quarter results announcements is at-hand on Wall Street, and bosses there were working to try and come up with a standard method of valuing their loans so that the market could make a fair comparison of how the banks had coped. This change in Merrill’s valuation casts doubt on the success of that exercise. There had been some doubts about how low Merrill’s original estimate had been, and Bill Fitzpatrick, an analyst from Johnson Family Funds, said: “This is a bloodbath for certain. It speaks very poorly to Merrill's risk management practices. Clearly heads are going to roll, and I wouldn't be surprised to see meaningful near-term lay-offs.”

Lee Norton, analyst at JS Asset Management concurred, saying that the results brought questions about Merrill’s management, adding that they were paying the price of having reduced numbers of experienced professionals in Merrill’s debt departments, leaving inexperienced heads in charge.

As Merrill reported a net loss of $2.3bn for the quarter, O’Neal blamed sub-prime market uncertainties, saying Merrill was working to resolve the impact.

The Bank said family spending’s future was ‘more uncertain than for some time’ as it was concerned about the health of the finances of UK households.

The growing economic gloom particularly leaves buy-to-let investors and first-time buyers exposed to economic worries, and the warnings will increase fears that the credit crunch if damaging the economy.

The problems began in the US sub-prime market, but have had such wide repercussions that Northern Rock had to borrow money from the Bank of England, savers queued round the block to withdraw their money, and now UK consumers are feeling the effects of increased mortgage interest and less chance of getting loans and mortgages.

Commercial property experts in the US have predicted that the economy would slowdown in the next few months and then probably tip into recession. Morgan Stanley told its clients: “It is very important not to underestimate the impact of the psychological shock of the failure of Northern Rock on people in the UK.”

The Bank of England’s Financial Stability Report said that buy-to-let investors, first-time buyers and low-income homeowners with mortgages were most at risk, saying that some may not be able to take the pressure of further increases in their borrowing costs.

The problems may spread wider. Equity markets are said to look vulnerable, and more mortgage defaults in the US could deepen the US economic downturn, triggering stock market falls around the world. For the financial industry, the first run on a bank for over 140 years means that lending rates are not likely to get any cheaper for a long time yet. Balance sheets remain fragile and the chances of further ‘coporate distress’ have risen in recent months.

This is an expensive and risky strategy as credit card interest rates are much higher than mortgage interest rates – typically around 15% compared with around 6.5%.

It appears that young people are the most likely to adopt this approach of shifting their debts, despite the risk of long-term ruin in doing so. With the credit card interest rates being around 2.5 to 3 times high than mortgage interest rates, there is an air of desperation to this way of staving off eviction and repossession, and, presumably, a hope that it will all get better soon.

Shelter revealed the facts in a survey of around 2,000 people, which showed that almost one in ten householders were propping up their mortgage with credit card debt in some parts of the country. The worst group was the 18 to 24 year-olds, where the figures was 7.5%. Shelter chief executive Adam Sampson said: “The number of people hit by the credit crunch, interest rate hikes and unaffordable housing costs is rapidly rising.”

This appears to be the result of borrowers over-reaching themselves when credit was cheap, and with the Bank of England’s base rate having rise from 4.5% to 5.75% in 12 months from August 2006, many people now simply can’t afford their new repayments on their income alone. Experts in the industry blamed lenders for letting customers borrow beyond their means. Heather Keates, director of Community Money Advice, said: “It's fine if you pay off the [credit card] balance every month but I would suggest most people don't - they just pay off the minimum, so the debt starts to spiral.”

Worse may yet be around the corner for many people with the imminent end of cheap fixed-rate mortgages suddenly adding hundreds of pounds more to housing costs.

Consumer confidence has been badly hit by the Northern Rock crisis – a very obvious manifestation of the global credit crunch that has come to Britain’s high streets. This has increased the possibility of a housing market downturn – especially in London.

Chief economist at the Royal Institution of Chartered Surveyors, Simon Rubinsohn, thought there was now a one in ten chance of a crash on the scale of 1990 to 1993 when negative equity hit so many families in the UK. He rated an even higher chance – 20% – of a 10% fall in property prices in London in the next 12 months with mortgages taking the biggest hit. The capital has been the strongest market performer over the last year, but the best hope it has got for the next year is to flatten out to no change.

The images on our TV screens and on the front of our newspapers of savers queuing round the block to withdraw funds from Northern Rock is bound to have an effect on consumers, and could result in slowdown in consumer spending, a fall in economic growth and a halt in the property market.

Already it has been reported that London estate agents have seen a drop in the number of enquiries, the quietest weekend of the year coming straight after the Northern Rock loan crisis. The market, some agents say, is taking a breather, with the buy-to-let market looking particularly vulnerable as lenders view it as riskier – despite an impressive payment track record by investors.

Major property developments in London could also be hit. The £1bn Shard of Glass tower is at some risk after the firm behind it complained of problems in the financial market hampering its attempts to secure further backing.

Better news all round was that the inflation rate dipped to 1.8% in August – from 1.9% in July – though food increases are expected to take it back up again soon.

They did say, however, that the US sub-prime mortgage market will probably have an impact on mortgage rates in the UK, but it might lead to some lower rates, not higher.

Martin Ellis, Halifax chief economist, said: “I don't think the stock market falls will have much of an impact. The economic fundamentals are still very strong, the economy is doing well and unemployment is still very low. If you look back to the stock market crash of 1987, the housing market remained strong and continued to be so into 1988.”

It is interesting to recall that following the stock market fall of 2001, people turned their backs on shares and invested in buy-to-let property instead. A repeat now would give the housing market a boost.

The view is that what is happening in the stock market – however dramatic – is a short-term issue, which would need to pan out for a lot longer to have an adverse effect on the housing market. However, this view does come with a warning that if the downward market does turn into a bear market then there could be wider implications for jobs in the finance sector which might result in an impact on the property market.

The turbulence could lead a rise in some mortgage rates, but a fall in others. Where funding for the mortgage market could get harder for lenders dependent upon the wholesale market, but swap rates, on which loan lenders base their fixed rates, are linked to gilt yields, which have fallen. Some mortgage lenders have already brought their fixed rates down by around 0.25%, and others could follow.

Index-linked mortgages would be linked to inflation rather than the base rate, or having a fixed rate.

Chief economist at Morgan Stanley, David Miles, said: “They would be very similar to the index-linked bonds the UK Government uses to issue debt loans. Instead of a fixed rate, or being linked to base rate, you pay a certain amount in excess of inflation.” Knowing that their mortgage repayments were connected to the inflation rate would help consumers better predict what their repayments would be. Miles said: “This is not a new concept, but in an environment where house prices have risen so much, this kind of loan has more benefits than ever before.”

Although repayments would increase with inflation over time, they would start at a lower rate than most current standard mortgages, thus making the process easier for first-time buyers.

Morgan Stanley has seen the popularity of 90% loan-to-value products with short-term introductory fixed rates decrease as they have not been totally suited to potential homeowners. The report also suggested that lenders should look further at shared-ownership arrangements independent of a government subsidy. Yorkshire Building Society is one of the four lenders in the Open Market HomeBuy scheme and a spokeswoman said that they had always considered the possibility of starting a shared-ownership scheme of their own, and were using the Government scheme as a pilot.

There is also a trend towards 100% mortgages as buyers are finding it increasingly difficult to save any kind of a deposit.

There were, according to the report less than half of the files on customers with self-certified incomes which explained why customers had to certify their own incomes. In fact, of course, self-certification of income might have been the right thing to do, but without evidence, the FSA can only be suspicious of the motives. The question is whether well-kept records might have painted a very different picture for the FSA to view.

There is little doubt that the sub-prime sector has made great strides in recent years to come into the mainstream form murky back-street dealings. Borrowers with debt problems are no longer forced into the ravenous maws of loans sharks. Sub-prime customers are now better served than at any time in the past. If one or two providers slip up in their processes from time to time, then the FSA is there to keep them in check.

Borrowers with poor credit histories now have access to a large range of competitive products from lenders who are strictly regulated (as the latest report amply demonstrates) by one of the toughest regulators in the world.

It is easy to make sub-prime a target for criticism, especially when it is a dirty word in the US after the goings-on over the Atlantic, but in the UK things should be kept in perspective.

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For adults, you can visit the famous Pleasure Island and enjoy the nightlife, Disney style. Pleasure Island combines fabulous shops, restaurants, dance clubs and music all into one great attraction for adults to enjoy.

Whether you are looking for live entertainment, theatres, shopping or restaurants, Downtown Disney is the place to be. Disney strays from their original theme parks and has created an attraction for children and adults alike to enjoy with so many different activities to take part in. It is free admission to Downtown Disney, but attractions like Pleasure Island and the indoor interactive theme park require their own separate admissions.

Take the opportunity and time within your next Florida vacation to visit Downtown Disney and take in all that it has to offer.

Experts still reckon there’s value in trackers. Some anticipate the base rate to peak at 6%, and that may not even be reached as the minutes from July’s Monetary Policy Committee (MPC) meeting indicated a recognition that the full impact of recent raises has yet to be felt by most consumers.

The tracker from Birmingham & Midshires was withdrawn last week. It was 0.51% below base rate and had a fee of £1,499. The building society still has a tracker at 0.76% below base rate, but that comes with a fee of 2% of the loan amount. A loan of £250,000 would therefore attract a fee of £5,000. Halifax also withdrew its tracker of 0.51% below base rate with a fee of £1,499.

It seems that lenders have already factored in the next rate rise – even though it may never come.

Trackers may still be the way to go so long as you can afford a further rate rise. This would work especially well if you think that the base rate may come down in 2008.

Nationwide’s latest tracker is at 0.37% below base rate for two years at a fee of £1,499. Cheltenham & Gloucester has a tracker at 0.17% below base rate for the whole mortgage term with no arrangement fee and no penalty charges, but it is only available for up to 60% loan-to-value.

Security of a set monthly payment only comes with a fixed rate mortgage. The arrangement fee is important. As a general rule, the bigger the loan, the more important the rate is, and the less important the fee is.

The meltdown has given 'serious reasons to worry', but may turn out to be a blessing in disguise if the consequences are radical re-think on credit risk, according to ratings agency Moody's Investors Service.

Earlier this year HSBC took a charge of $10m (£4.8m) on its exposure to the market. Beyond that Australian hedge fund Basis Capital Fund Management recently hired private-equity group Blackstone to help limit it problems resulting from mortgage securities.

However, Moody's believe that the subprime problems will not cause a risk to the system, but will act more as an opportunity for a 'reality check'.

Borrowing costs for non-investment grade companies have soared as a result and more than 20 US firms have cancelled bond sales because of lack of interest.

The subprime problems sparked a sell-off which has uncovered many investors ready to acquire assets at lower prices, given the 'ample liquidity'. Moody’s conclude that there is no general threat to the integrity of the financial system, but reappraisal of risk is welcome. Investor 'nervousness' will probably last until the size and location of losses is known, but that is not likely to be soon and “headline risk will probably test markets' nerves.”