Talks are taking place to privatise and secure the sale of 100% mortgages lender Northern Rock. At last it looks like the preferred option for the Northern Rock staff, share holders and mortgage brokers could be announced by the Chancellor Alistair Darling in the commons on Monday.

Speaking in China, Mr Brown said: “Now we’ve been presented with a report that we commissioned from Goldman Sachs and it gives us a number of options for the future.

“It’s right therefore to have the discussions with the private sector.

“All options, including public ownership, on the road to moving the firm back into the private sector are on the table and are available to the government.”

 Ever since the crisis happened 100% mortgages offered by Northern Rock have not been competitive within the market. Hopefully the new company will be able to offer a product that is still very much needed within todays first time buyer market.

The decision has been made by the Bank of England to keep rates at 5.5%. They have resisted pressure to make a change against growing pressure from retailers.

It must have been a tough decision with all the recent signs in consumer spending and the inflationary pressures. A rate cut could have lifted both consumer and general business confidence; it could also have risked fuelling price pressures growing on the back of higher energy and food bills. Npower increased its gas and electricity prices last month and warned other providers would follow suit.

The British Chambers of Commerce said the MPC had missed an important opportunity to underpin confidence and limit the damage to the economy.

“A modest interest rate cut would have alleviated the threats to the banking system and would have helped restore the smooth flow of credit in the economy,” said David Kern, economic adviser to the BCC.

Analysts are expecting the MPC to cut rates in February.

The Bank of England meet this Thursday as they do every month. But the economic climate is still blowing up storm. Bad credit mortgages crisis is still hanging heavily in the wind. There is so much talk about house prices and people struggling to make ends meet never mind the increase in mortgage payments when they come of those fixed rates.

Remortgages are big business in 2008 “What will be the deal i can get” you will hear people cry. Location - location - location will be replaced with remortgage -remortgage remortgage!

New mortgage approvals have dropped again to 83′000 down from 89,000 in October which was the lowest since the start of 2005. House prices finished anywhere between 5-8% up depending on who statistics you agree with.

Although the Bank of England cut rates last month they are widely expected to cut them again this month due to the housing market slow down and the increased cost in borrowing due to the money markets feeling the effects the credit crunch.

The big question every one will be obsessing over this year will be. “What should i do?” This largely depends on are you a first time buyer or looking to purchase your property with a 100% mortgage.

If your a first time buyer with a deposit or looking to secure your purchase with a 100% mortgage you will be no doubt keeping your finger crossed that house prices are www.clickngomortgages.co.uk/free-mortgage-tools.asp falling.

100% mortgage lenders haven’t all tightened there lending beyond today’s property prices. Birmingham Midshires is just one lender offering reasonable lending multiples to anyone with an average credit rating. 100% mortgage lender Northern Rocks door are still open, but there rates a fees are not market leading but they still have deals to suit certain circumstances.

First time buyers with a deposit still have many options available to them. They now have the vendors on the back foot. It’s a first time buyers market and they should be negotiating a really good deal. You can always increase your offer depending on how much you want the property. Developers looking to shift new properties will be offering incentives for first time buyers to attract them to the property market.

So the media band wagon begins. Confidence has a big part to play in the housing market. So are we all wishing for a crash, or do we want more realistic house prices. The danger is people will start to believe the hype. House price growth is slowing, high street confidence is suffering but what are the facts.  

House price growth this year was recorded at 8.1pc over the last 12 months. The last few months have been more volatile so its hard to get an accurate measurement yet. This due to buyer caution and the negative media headlines. There will be some good opportunities in the coming months as vendors need to move and developers need to achieve sales by offering incentives. This will start to show in house price indices. Better prices will reflect better yields for buy to let mortgages and potential growth over the next few years. Short term wobbles in the market will be ridden out by professional investors.

Which way will rates go?

The market fully expects bank base rate reductions of up to 0.75pc over the next year. If this happens, professional investors using base rate tracker mortgages can expect substantial buy to let mortgage cost reductions over the coming months and rates of around 5pc are likely on many products, before fees. 

Will rents rise?

According to recent RICS, ARLA and Paragon surveys, rents are already up. London rents are already at 15pc and, as usual, this is likely to be preceding significant growth in the rest of the UK regions.

What’s driving growth?

First time buyer mortgages have dropped from over 20pc of the market to less than 10pc. Homebuyers are buying in less but still at a greater rate than property coming on the market. This represents a substantial number of people switching from buying to renting and a disproportionate number of smaller households resulting from frustrated first time buyers unable to get onto the ladder. This will lead to substantial growth in rents for flats and terraced property.

Undersupply or oversupply? 

Government’s increasing targets for new housing indicate there is a massive undersupply of property in the UK. The talk of oversupply has referred mainly to rented flats in city centres. However, it is now becoming clear that this was a relatively small oversupply and agents in many cities and towns are reporting strong rental demand surges and a rapid reduction in rental accommodation available. Even city centre flats are recovering and rental demand is so far boding well for strong rental growth in the future.

Inflation? 

Competition between the supermarkets will keep inflation under control, oil prices are now dropping and average inflation for the last three months has been bang on target, at just below 2%. Clearly interest rates are now starting to lower following a sharp fall in inflation over the last few months. The Bank of England is on target.

Population & immigration?

Government figures suggest the population will grow 4.4 million by 2014 - that represents an enormous extra demand for housing when there is already a shortage.

Should I buy? 

Rents are rising and opportunities exists to use the current fearful market to your advantage, buying at better prices than has been possible for some years, from forced sellers (some developers and people who need to move house very quickly). Buying cheaply in a strong rental market will significantly enhance yields for buy to let mortgage investors and allow mortgage costs to be covered relatively easily and relatively quickly.

Professional investors in any market act against the crowd. This is the opportunity to think like a professional investor and buy at a time of market pessimism, with a 10 to 15 year plan. What is more, rents will pretty much cover your mortgage straightaway with strong returns already being reported.