In the case of the offset mortgage, there is much to be said for the concept of utilizing the investment instrument in a time of financial crisis, but with the fees looming large and costing more all the time, it can be somewhat difficult to ascertain what type of savings is really occurring and whether or not you’re better off with the offset mortgage. There are many mortgages available, the offset mortgage is acceptable for a certain segment of individuals who have a very specific needs and specific desire for their mortgage.

Matthew Hall, head of tax services at Wilkins Kennedy stated, ‘Buyers simply believe prices are too high. They don’t want to commit if they believe that prices will continue to drop in the coming months.”

‘If the government really wants to create more interest and stimulation in the lower end of the property market then they should consider exempting stamp duty on all transactions up to £250,000 coupled with the re-introduction of mortgage interest tax relief for purchases of properties up to that same value,’ he added,

At the same time however, borrowers need to be aware of the fees they will pay. Ghiloni continued, “With the current challenges facing the mortgage market, it is not surprising to see that fees have risen by so much. This means that it has never been more important to look at the true cost of your mortgage, taking into account the interest rate but also any fees and charges that you have to pay.”

Alison Hatrick of the National Association of Estate Agents (NAEA) said “There is a lot of stock on the market and not so many buyers around so that is obviously not good news, but there has been a reversal in the trend to buy first and sell later. People are putting their homes up for sale first and that means they can afford to sit it out so we are not necessarily seeing big price drops because people are not prepared to agree to that.”

“Homeowners have been the most visible losers in the credit crunch but credit card customers are also sharing the pain.” said Sean Gardner, director of MoneyExpert.com. “Average rates of 16.8% were bad enough in February but despite two Bank of England rate cuts which reduced borrowing costs by 0.5% credit card average rates have increased by 0.6%.

“Mortgage customers might complain about rates of six or seven per cent but for credit card customers the charges are much higher. And with some cards charging more than 40% it really seems like the sky is the limit.”

“We’re only now starting to see a serious impact from the crisis in the euro-zone economy,” said Christine Li, an economist at Moody’s in London. “It’s only a matter of time before larger companies feel the impact of squeezed credit conditions.”

“There’s a strong link between the feel-good factor of a healthy housing market and consumer confidence,” said Ed Stansfield, an economist at Capital Economics in London and a former adviser to the U.K. Treasury.

One result has been that credit advisers are busier than ever. “We’re very, very busy,” said Mark Fry, head of the London office of restructuring adviser Begbies Traynor. “We’re hiring new people and the staff are all working longer hours.”

The Liberal Democrat’s shadow Chancellor, Vince Cable, said: “Sir James’ caution towards government intervention in the housing market is welcome. It is critical that siren voices in the City don’t seduce ministers into using taxpayers’ money to underwrite new bank lending and reinflate unsustainable house prices.

“It is inevitable that pain will continue to be felt in the mortgage market for some time to come, but the answer is not to put more public money at risk which would only profit the banks. The Government should concentrate on helping families in danger of repossession. Ministers must allow councils to replenish their housing stock to meet rising demand.”

Ray Boulger of John Charcol stated, “Fixed rates are coming down, peaking last month, now that swap rates have been coming down for the past few weeks. Two-year swaps are down from 6.5 per cent to 5.95 per cent, that clearly gives lenders the opportunity to offer cheaper fixes.

Martin Ellis, chief economist of Halifax, said: “House prices have declined by 6.1 per cent over the past year. Nonetheless, the average UK price remains slightly higher than two years’ ago and is appreciably stronger than three or four years ago.”

“As longer-term swap rates are lower than those for short-term money, these deals could become more competitive,” says Melanie Bien of Savills Private Finance. “They buy you peace of mind and you won’t fhave to pay remortgaging costs every couple of years.”

David Hollingworth of London and Country added, “If a bonus is an integral part of your income – and you will need to draw on that money at some point – you can still benefit by offsetting it, while retaining the ability to withdraw it when you need.”

David Kuo, Head of Personal Finance, says: “The recent mortgage approval figures from the Bank of England are further proof that the property market is in the midst of a severe downturn. A revival is unlikely until banks get their own houses in order.

“Further evidence, if any is needed, was provided by Nationwide, which reported the sixth consecutive fall in house prices in April. Meanwhile, Prof. David Blanchflower of the Bank of England has highlighted the possibility that house prices may fall by a third over two or three years. Fool.co.uk believes that house prices may fall 20% this year.

“So, for those who are looking for green shoots of recovery, they may be some way off yet. Halifax, which supplies one in five new mortgages, recently warned of a significant reduction in the net lending market.”

“We cannot ignore the fact that the credit crunch has forced lenders to tighten their belts and reject applications that may lead to further write-offs,” Simeon Linstead, head of personal finance at uSwitch.com, said.

“The fact remains that just because a consumer appears to have a ‘’suitable” credit score, it doesn”t mean they are always honest about their income and actually have the cash available each month to pay the bill.”