ryanb741

-15% London Prime + 5% Greater London -5% National

I've had loads of loans and credit card debts - sometimes totalling up to £50k but much lower than that now (but I am a relatively high earner), plus a mortgage, never defaulted, the occasional late cc payment (usually when i am on holiday and forget to pay )and I can always get credit cards and loans. On the rare occasion I was refused 9 months ago it was because I wasn't on the electoral roll. Once I was on the roll the credit was always granted. They want to see consistency of employment, not too many address moves, if you are a home owner the better, plus no defaults ccj's etc Credit companies don't even seem to care too much about the occasional late payment, they want to see that all debts are paid off in full eventually as it makes more money for them. Hilariously a work colleague took out a mortage with Northern Rock last year consisting of 90% LTV mortgage, 10% unsecured loan, upon completing on the property told NR to shove their 10% unsecured loan he wasn't paying and has just remortgaged with Abbey halfway through the mortgage term (again telling Northern Rock they can shove their 3% early redemption charge). Abbey were only too happy to give him a mortgage - this is supposedly during a credit crunch (although he can't get credit cards at all)

Regardless of how 'independent' the BOE says it is, the reality is that the people who vote in governments and have the biggest say are those who have most to lose from HPC etc. So the reality is that the BOE members will not want to be seen as the people who brought the house (sic!) down. I expect that within the next 12 months some spin around how we now live in a high inflation environment etc and that like the US 2.5% needs to be the CPI target OR putting mortgage repayments in the CPI basket meaning that you can lower IR and subsequently lower inflation are factored in. We live in a selfish world where stats, money and equity are all virtual, the powers that be will do what needs to be done to keep their supporters happy in the long run. Call me a cynic but people will do what's best for themselves - we do live in a capitalist economy after all.

I reckon we are looking ata definite hold, possibly a further rise in 2007 then a series of cuts to take us to 5.25% by end 2008. Interesting to see the Swaps Rates are now retreating. Could be that we have hit the interest rate peak already

Chance of - Guaranteed at some stage, but who knows when? Crash by - 25% in some areas, perversely I think London will still continue to increase at YOY 10% through any crash Areas - All except London I am - Neither

I do feel however (and I'll admit I may be wrong) that we are near the peak of this rate cycle - the Government will NOT allow the BOE to put the UK into recession and don't be surprised if we get 'spin' stating that the CPI inflation target may be revised to 2.5% if that gets Brown off the hook. I just think we are pretty much near being as bad as we can get, what will impact the markets more than Interest rates is a tightening of lending criteria.

I would like to see prices come down..... BUT....... IMHO interest rates are nearing (or are already at) their peak, this has had minimal impact on the housing market. If anything prices will continue to rise and therefore if a house is priced at £275k now, it is unlikely to come down any time soon (dons flak jacket). I would however offer £250k as £275 is near enough the £250k stamp duty threshold to warrant this. If the buyer sticks to their guns, offer £250k for the house and £15-20k for the fittings etc to avoid paying the stamp duty. However if it is a decent property prepare to be outbid. I would avoid listening to all the bears who have a vested interest - sure houses will at some time drop but I don't see it happening any time soon and most certainly NOT in Brighton.

Good. If it means that lenders are prepared to provide loans only to people who are less likely to default and can manage money more effectively this can only be a good thing for the long terms sustainability of the economy (and to a degree the housing market too). Far better to have a housing market where prices increase year on year by about 6% than one where properties see double digit growth for a period of years and then crash and burn, and then the cycle is repeated again. You have to feel sorry for FTB's stuck after having debted themselves to the hilt to suffer because they bought at the peak of a cycle. Far better to see more gradual, long term growth at a rate marginally above real inflation IMHO. Property in the UK WILL still go up, clearly your house today will be worth around double in 10 years, however who knows what it might be worth next year. It could be 10% higher or 20% lower, depends where we are in the cycle. I suspect regional UK is near the peak of the cycle, London still has 18 months to go IMHO as London hasn't seen the same 5 year growth as the rest of the UK.

Used to be called the ABC Cinema. Very big flat - lounge is over 40 feet long and big bedroom. You can't compare it to any other 1 beds in Streatham as the floor space is over 900 sq feet which moves it into 3 bed flat territory, plus the balcony area alone is 12 feet. I actually think it is a safer medium term bet than a lot of property in that area as the sort of buyer who would purchase it will tend to be aspirational with more cash. That being said, if a crash takes place in London, I can see it going back to around the £240k mark. A link to the development's website is here; http://www.thepicturehouse-streatham.co.uk/

London is crazy and now it's the previously 'unfashionable' areas that are rocketing. I moved from balham in November last year and bought a 1 bed flat offplan in a converted Art Deco Cinema on Streatham High Road for £240k. Sure it's a big flat (900+ square feet) which would make it big even if it had 2 beds but it is Streatham after all and when I bought it the cost of an average 1 bed in Streatham was about £180k, so I was worried about paying well over the odds. Had it valued last month at £285k (£45k increase in 6 months), plus they are putting a fitness first in the basement and a Jamie Oliver restaurant in the front which the valuer said would add another £40k to the value. So when everything is completed, I am looking at around £330k for a 1 bed flat in Streatham. That is absolute madness (although great for me as my aim is to sell it on in 4 years and move back to Thailand). But when I enquired as to why my flat is now valued the same as comparable properties in Balham and Clapham the valuer said it is because of the vast amounts of investment being put into the Streatham Hill area (John Lewis coming back, gentrification of High St etc). It gets to the stage where previously undesirable areas get gentrified to the extent that they become too expensive and then people have to move to an even worse area from a historical perspective. What's next - £300k studios in Peckham? £500k penthouses in Catford? London just has no correlation to the rest of the UK now.

I'm nots sure that I would be confident that all areas will drop, certainly not in London. The current surge in interest rates is likely to be near its peak, what will effect the market more than that however is tightening of lending criteria which banks will have to do to avoid the kind of fall out currently being seen across the atlantic. But IMHO if you have a nice property in an up and coming part of London with good transport connections you will continue to see prices rise. I would be worried if I had just got on the proprty ladder and paid an inflated rate in places outside of London (especially Northern Ireland) but I really don't foresee a crash (i.e. > 20% property deflation). If I had just bought a nice spacious flat in Streatham Hill as an example I would be very pleased with myself as that area will IMHO take off at some pace. On the flip side if I had just paid over the odds to get myself a shoebox in Clapham I would worry about recouping my money if I had to sell up in a hurry (which a fair few people are going to be looking at doing shortly). But the biggest impact on property prices won't be interest rates it will be a tightening of lending criteria which stops people borrowing more than they can afford to get onto the ladder at all costs (which has led to the increases in prices). In London, with the acute housing shortage, high salaries and foreign immigration it won't be such a problem. We will in all likely see two property markets in the UK, the 'outside of London' market which is going DOWN and the 'Inside London' market which is going to keep going UP. London property has in real terms increased more slowly over the past 10 years than outside of London (something like 60% vs 100+% outside London) so if anything much of London's market is undervalued when compared with the rest of the UK. Put it this way, a £200k one bed flat in Crystal Palace, with good transport links to the centre of the world's financial centre is a much, much better proposition than a £150k flat in East Sussex. Supply and demand makes it so. Whilst any upcoming property crisis is going to make big problems for buyer confidence in East Sussex (where income multiples to buy a starter home are maybe 8x now), in London, a starter flat at £200k is maybe 4-5x income multiple. As soon as prices dip in London there will be a whole host of would be buyers who are now priced back into the market, pushing prices back up. Outside of London, where demand is much lower, this is where the problems will lie IMHO.

This thing is, places like Twickenham often aren't particularly well connected from a transport perspective. Most people on this forum naturally predict a huge market crash, from my perspective what will happen is buyers will be more cautious about what they spend their money on and won't pay silly prices for sub standard property just to 'get on the ladder'. Having said that, if you have a nice, modernised property well connected for transport in London you will be fine. I would expect that places like Streatham Hill (but not Streatham Common), Crystal Palace, Wanstead etc will see double digit growth but some of the more traditional hotspots may struggle. Places like Wimbledon are vastly overpriced.

Well according to the majority on this forum now would be a perfect time to invest in property

My money would be on a .25 rise, but that will probably be it. If you look at the economic reasons for this, currently RPI is at 4.3% and base rates are at 5.5% This represents a spread of 1.3%. This is too low. The BOE will typically be looking for a spread of around 2%, which on current data would see interest rates peaking at around 6.25%. The reality is however that interest rate increases will in theory lead to a decrease in RPI, plus previous rate hikes have yet to see the full impact on RPI yet. So if interest rates go to 5.75%, on current stats the spread will be 1.55%, the reality however is that RPI will be decreasing to around the 4% figure pretty sharpish, and sub 4% by year end. So I reckon at most interest rates will be at around 6% tops by end of Q4 2007, but by mid 2008 should be back around the 5.5% mark. They probably won't dip below that mind for a while, so gone are the days of sub 5% mortgages. This will certainly slow house growth in many areas (I would exclude London from that). I am neither an economist nor a member of the BOE so this is just my personal opinion!