Mortgage lending falls two thirds to record low

[Cyberman]

Recent huge inflation came from commodities bubble - now this is deflating however UKs currency is dropping faster than Russian rouble, shocking considering that Russian's main exports gone 3-4 times down in prices in the last few months.

Don't forget that the pound has recently devalued 20% against the Euro. This makes exports cheaper BUT will create strong inflation in due course because of the level of imports from the Eurozone. Many people seem to be oblivious to this fact.

[AtW]

Many people seem to be oblivious to this fact.

Not for long...

[Doggy Styles]

deflation

This applies to majority of people who bought houses in the last few years...

Anyone know the russian for rampart?

[MrMark]

Rampant inflation IS expected after an extended period of exceptionally low interest rates. Your salary theory has been proven wrong over the past few years so I do not go along with that at all.

Except that it's the past few years that have been the anomaly and which have caused the present crisis ie. A typical bubble.
Unless salaries start rising again (unlikely) don't expect house prices to start going up again anytime soon.

[Cyberman]

Except that it's the past few years that have been the anomaly and which have caused the present crisis ie. A typical bubble.
Unless salaries start rising again (unlikely) don't expect house prices to start going up again anytime soon.

I don't expect houses to rise dramatically at all after having had rises of over 100% in recent years. Steady growth will do me and that will restart around 2010 due to low interest rates and better management of the economy by a new government.
I am currently paying a quarter(and falling) of what I was paying on a mortgage a year ago. A scenario of low interest rates which will kick-in in approx 6 months time as people drop off high fixed rate mortgages will stimulate people to buy rather than pay high rents. Remember, you heard it here first!!

[AtW]

as people drop off high fixed rate mortgages

Those people won't get tracker morgages anymore, in fact they'd struggle to get new morgage anywhere and will have to stick with their current bank who will move them to SVR that has little to do with BoE rates.

The sooner asset prices get deflated the faster recovery will start - all Browns attempts to prolong this deflation will just result in longer recession here.

[Cyberman]

Those people won't get tracker morgages anymore, in fact they'd struggle to get new morgage anywhere and will have to stick with their current bank who will move them to SVR that has little to do with BoE rates.

The sooner asset prices get deflated the faster recovery will start - all Browns attempts to prolong this deflation will just result in longer recession here.

Many people are stuck on over 6% fixed mortgages There are mortgages currently available at around 3%, so considerable savings of around 50% can be made, even though these are not trackers. That means that people could double their mortgages(if they are stupid enough ) and still make the same monthly payments. This will put upward pressure on house prices around 2010 !!

[AtW]

Many people are stuck on over 6% fixed mortgages There are mortgages currently available at around 3%, so considerable savings of around 50% can be made, even though these are not trackers.

This assumes these people will get a morgage at this rate - a very wrong assumption to make in current climate in my view.

Any new morgage will operate on the assumption of big asset falls - this means people who don't have a lot of equity in their house OR deposit won't get good rates in my view.

[Cyberman]

This assumes these people will get a morgage at this rate - a very wrong assumption to make in current climate in my view.

Any new morgage will operate on the assumption of big asset falls - this means people who don't have a lot of equity in their house OR deposit won't get good rates in my view.

I'm not saying this will happen immediately. I just see this scenario panning out over the next year or two as the economy improves.

[AtW]

I'm not saying this will happen immediately. I just see this scenario panning out over the next year or two as the economy improves.

During this time overpriced houses will be falling down to sensible levels so banks will be asking for hefty deposits to reduce their risks - lots of people will be in negative equity so they won't be able to move banks, perfect time for banks to recoup their subprime losses using high SVR rates.