the banks have been greedy, they lent too much money and instead of realising this they themselves started to borrow money.
businesses which would have naturally closed down stayed open - take MFI as an example, it should have folded many years ago, instead it kept going bust and someone bought it back to life everytime with bigger and bigger bank loans.
end result, banks have no money so they cannot lend money.
the only shame in all this is the bankers still have their jobs, I would sack the lot.
same as house prices, they are way OTT. Take Milton Keynes as an example, average wage [in job adverts] was about £20k, a two bed 'starter home' cost £180k, 9 times the average wage !
the prices need to correct themselves, hopefully they will by the end of next year