Ok, the title is a little bit off the mark and is more of a tenuous prediction than fact at the moment, but hear me out.

As you may have heard, Northern Rock is having a bit of a problem convincing its customers that it's NOT going bust. This comes after the BBC reported that Northern Rock had approached the Bank of England for emergency financial support. Naturally, the tabloids got wind of this and next thing you know, the world and his wife are queuing outside their local Northern Rock branch demanding their money (cos it's obviously safer under their mattresses :-/ ).

What people don't realise is that it's quite common practice for banks to borrow huge sums of money from each other for short periods of time. A lot of people also don't know that it is quite normal for the BoE to act as a ‘lender of last resort' for banks struggling to raise funds. However it is rare, and it's this rare occurrence that has sparked panic withdrawals. I expect more banks to start doing this too.

Due to the recent problems in the US sub-prime mortgage market, banks are a little more reluctant to loan each other money, and are now charging each other even more for these loans. These extra charges are now being passed onto the customer, as Abbey, Standard Life Bank, Halifax and Bank of Scotland mortgage customers have recently discovered following a hike in their mortgage rates.

Now this is where I start predicting... a hike in mortgage rates is only going to mean one thing: it's going to be harder and more expensive to buy property. This is then going to set off a chain reaction: higher mortgage costs are going to lead to less mortgages, which is going to lead to less house sales, which is going to lead to lower prices, and well... then it's all history. House price free fall.

Ultimately, who's to blame for all of this? Nope, not the BBC, but the banks themselves, and their shareholders. In recent years I've watched the banks getting ever richer and greedier, and more desperate to satisfy their shareholders. One of the ways they did this was by making credit a hell of a lot cheaper and easier to get hold of, even going to the point of giving people loans and mortgages well above what they could afford. I'm not an economist, but this is just begging for disaster: whilst a lot people can afford cheap credit, not many can afford normal or expensive credit, and this is what's starting to bite the bank's bums.

I've enjoyed and taken full advantage of the recent credit boom - I'm a bit of a 0% credit card whore - but that's because I knew I could afford it if things became expensive. At no point did I over commit, and at no point in the future will I over commit myself. Unfortunately, others will.

So, I guess my title is a bit tenuous - the BBC probably won't ultimately be responsible for a future house price crash, but they have brought the effects of the US sub-prime mortgage market problems into the living rooms of the average Joe Schmoe here in the UK. The UK banks are catching the wake up I've been expecting for some time, and the public are the ones to lose out.