Sorry one more question..

Given the fact that bank valuations are quite conservative at present, would this not imply that the mortgage valuer's valuation is pretty near the mark?

Am I being naive? Can property sourcers influence his decision greatly?

Some very good posts here, as before credit to savvy and tonyb.

The one thing I would like to add is that people are perhaps underplaying the cause of this downturn. Banks / Lenders have massively over extended themselves in the sub-prime crisis and have been burned.

How badly they have really been burned, we don't know yet. If news comes out that there were actually more losses than previously reported, then it will get really hard to get a mortgage. Right now, they are working hard to ensure that they don't get any lending business. Anyone who has the best lending product on the market, withdraws it !

If (and hopefull when) the mortgages become more accessible, that is when things will get back on track.

The problem might be if the banking crisis gets worse, in which case house prices will fall significantly.

Interesting quote from a piece in the Times today...

'...professional investors, who have a decade of buy-to-let experience behind them, are taking a braver approach. A few professional investors, with significant equity in their substantial portfolios, have emerged to snap up the more attractive auction properties, which includes new-build homes selling at an average discount of 26 per cent. Elsewhere, professionals with an eye on above-inflation rent increases are snapping up entire blocks of flats, which are being sold off by distressed developers.

'As prices slide further, more of these professionals are emerging and taking advantage of their strong position, which allows them to strike advantageous deals with lenders. It is this easy access to credit that is one of the advantages that the cash-rich now share. Noel de Keyzer, of Savills, says: “A lot of people start off saying they are cash buyers but after they have completed, it turns out that they have borrowed some of the money. This is because they are able to borrow from lenders at not much more than the base rate of 5 per cent.”