Forget about interest rates (up to a point), its all about loan (and mortgages) which need to be controlled really. The problem which happened (with Northern Rock) is that they lent vast amounts of money to people (4, 5 and 6 times two peoples/parents income) which could NEVER be properly repaid. This then also meant that house prices went through the roof, estate agents got really greedy, which furthered the problem.
The high house prices, put the market totally out of first time buyers, which eventually meant to the demise in the house market. This slump was then echoed in the interest rate drops by government to try and stimulate house buyers with low loan rates, but it was still too high for first time buyers. This then effects business, which leads to a recession and crap £.
Summary - every action has an equal and opposite reaction - for great wealth, there will be great poverty.
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