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The toll of the credit crunch so far is four banks and three building societies. Speaking as someone who has been away for a fortnight, it is hard to believe what has occurred.

Back in early September, which may as well be the Middle Ages as far as financial services is concerned, the fallout from the credit crunch seemed to have calmed.

Just 20 days on, now Lloyds TSB is set to gobble up Halifax, and the mighty Spanish muscle of Santander is ready to take Alliance & Leicester and Bradford & Bingley under its wing.

Even Nationwide has had to ride to the rescue of little Derbyshire and Cheshire.

As I write this, US Congress has just voted against the £380bn bailout plan, and the Dow Jones has had its biggest single day fall.

I say that, because I have the feeling by the time this column is published the shape of the economy may have changed again.

Us journalists are very fond of telling our readers that this is the worst economic downturn since the Great Depression of 1929.

We have written reams of copy on how fuel costs and shopping bills have pushed household spending to the brink.

The problem is the impact of this for normal people has barely been felt and that is what is scary.

Anyone who works in a bank, or sells mortgages is at the sharp end of this crunch.

Some will have seen friends put out of work or face redundancy themselves. Mortgage advisers are facing some very challenging decisions about their own survival as home loan sales fall to their lowest recorded level.

Physically, high streets around the country are set to change forever. In my small corner of south-west London, there is a Lloyds TSB facing a Halifax branch and no more than 100 yards apart there is a Bradford & Bingley, an Abbey and an Alliance & Leicester.

Any bean counter at a one of these newly formed superbanks will quickly figure out that this kind of duplication is not necessary.

Not only will it see potentially three vacant business premises but it will cost local jobs.

But it will be a longer journey still before consumers arrive at their own personal credit crunch. It is creeping up on them though.

Most of us generally are pretty bad at budgeting so we will not notice the extra pounds here and there that are being added to our shopping bill each week.

And we have had a mild summer, so the extra heating costs have not really taken effect.

In the next few months most employees will be finding out about pay rises for next year, only to find stretched employers have had to pin any increases below inflation.

Many will not have remortgaged yet but when they do they will find money markets are riding 0.8 percentage points more than they should be and that the fees of switching deals have soared.

Plus many families will have some flexibility in their budgets, a bit of surplus in their current account or spare spending on their credit card.

It will be a drip, drip, drip effect as each one of these slowly gets used up. But when they do, suddenly they will find no more credit available: and it is only then that mortgage payments start to be missed and repossessions soar.

Good buy-to-let

Much has been made about the death of buy-to-let. Like standard home sales, those with plenty of equity and an outlook for the long-term can still reap rewards. But you only need to have a look at the list of top 10 lenders from the second half of last year to see how the market has changed.

They were Mortgage Express, Birmingham Midshires, Paragon, Bristol & West, Cheltenham & Gloucester, Northern Rock, Capital Home Loans, The Mortgage Works, The Mortgage Business and Barclays.

Today Capital Home Loans and Paragon are not currently lending new money, Mortgage Express and Northern Rock have been nationalised with the Rock offering only a limited range of products, Birmingham Midshires is to become part of Lloyds TSB and The Mortgage Business has closed.

There is only one thing that less competition means and that is higher prices.

Forward planning

A quick question posed to the 10 biggest building societies revealed some interesting results. They were all asked what percentage of their outstanding mortgage book was through wholesale funding?

For the top six the level wavered at about 30 per cent. But then West Bromwich Building Society revealed none of their book came from the wholesale markets. A quick look back at our best buy savings tables reveals the same society at the top for the last few months, plus some good mortgage deals. Good value from a classic business model, big banks should take note.