The number of mortgage approvals has sunk again over the past month to a new record low. In June the number of approvals sank 23% to 21,118, 67% less than June last year. 

The British Bankers Association said the number of homes sold in 2008 was likely to be the lowest since the recession at the start of the previous decade. 

The figures for mortgages approved, but not yet actually lent, are considered are a very good indicator of near-term trends in the market. As such, they suggest that the collapse in sales is likely to continue for the rest of the year. 

Although the Bank of England has cut interest rates since the credit crunch started last year, mortgage lenders have generally been moving their mortgage rates in the opposite direction. 

The average two-year fixed rate deal for new borrowers is now around 7%. 

The current collapse in lending to home buyers is outstripping the worst predictions of even the gloomiest commentators.

The consumer action group Which? has condemned mortgage advisors for often giving inadequate and misleading advice to customers. 

Using undercover researchers posing as consumers Which? visited 50 banks, independent advisers and estate agents. They found that just four gave advice to an acceptable standard, with 41 failing to provide at least one key piece of information. 

The primary concern was that many advisers appeared more interested in selling insurance rather than giving tailored advice. 

The mortgage advisers that performed poorly were reported to the Financial Services Authority (FSA). 

41 of the advisors visited failed to give the researchers all the information required by the regulations of the FSA. This meant they failed to say if their services involved giving advice as well as information, they failed to show the customers an initial disclosure document, or they failed to give them a “key facts” illustration. 

Only four managed to do these things while also checking if the customers could afford the mortgage, explaining properly the type of deal on offer, and then advising if it was suitable or not. 

Two-thirds of the advisers took the opportunity to try and sell the researcher an insurance policy that Which? claimed was usually unsuitable for the customer.  

This evidence highlights a problem that has been around for years in the financial services industry but which is growing in prominence. This is the blurring of the distinction between advisor and salesman. 

Before taking the advice of anyone about financial products, try to find out if they have an agenda. An ‘advisor’ on commission will not give you sound advice and yet turning to a professional for advice can be a great help.