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Is this the de-coupling effect that was proved to be complete nonesense when the last shock hit the US and UK stockmarkets?

Growth, well only just. Low interest rates, but businesses and homeowners struggling to get loans. The forclosure debacle looming like a tidal wave about to crash over the 'recovery'. I see a lot more downside potential than up. As stated elsewhere, we could easily see banks under huge strain...

At the moment it is more a case of closing your eyes, crossing your fingers and hoping it all blows away before anyone notices.

I have no idea why the stockmarket is so bouyant, none of this downside potential is being priced in. I would not recommend stocks or property as an investment to anyone right now, next year could be messy.

I've been hearing some very smelly stories from the States about the fall out from the sub-prime debacle. If they turn out to be true then expect bank lending to dry up and prices to take another serious battering when the news breaks. Hold onto your hats lads, it's gonna be a bumpy ride.

Yes and no. Of course I was being simplistic, but at the same time the re-packaging and re-selling of mortgages in the secondary marketplace can only happen if there is a ready supply of new mortgage lending. If lending dries up, so does the secondary market, hence the rush to lend to anything...

How it will work, is that other lenders will step in to the void left by Lloyds but charge higher rates. Landlords will then pass these costs onto tenants so rents will rise.

I think the comment you made earlier about concentrating on the buy-to-let mortgage market was very sensible. People are going to have to accept that it is not a god given right to own your own home, and that banks do not have a moral obligation to lend to you. This is the new world order...

The simple fact is that the financial world is in shit because the banks gave mortgages to members of the public who were simply not credit worthy. The ONLY way to repair this damage is to tighten lending criteria for at least a few years, if not permanently. Get used to it.

Ok then there is a much stronger case. But the fact is that people do need a supply of residential properties to rent so who should own these in your opinion? Large institutions? Gangster landlords? I'd much rather there were a stock of well maintained properties available from decent landlords...

Are second home buyers bidding up 1 bed flats in urban areas? (And to clarify, a second home is a secondary residence for yourself so not a residential let.) I find that hard to believe, in which case I don't see how it can have the effect you suggest on first time buyers. As has already been...