LIBOR is the rate that banks lend to each other at.  In a credit crunch there is a big disparity between the base rate set by the bank and the LIBOR.  When things go back to normal the disparity is small.

 

So during the credit crunch the disparity was around 1.5%.

 

Now the disparity is 0.1%.

 

That is a signal that things are at least looking up.  How much the banks are lending to each other I do not know but at least the rate is not punitive.

 

This explains why we have been some rate cuts in the deals being offered to property buyers.

 

So are we at the top of the slope ready to slide down in to property buying frenzies?  Not really.  There will be bargains still but please be aware the first time buyer is back. 

 

They are your enemy if you want to talk in fighting talk.  They have the capacity to outbid you by quite a large margin.  So well located properties will start becoming out of your reach and then well decorated properties next.

 

Then we are all left with the refurbishment wrecks to battle over.  But as soon as Sarah Beeny comes back with the Property Ladder 2010 show then the wrecks will start going for top money and 2007 levels will have been restored.

 

So get ready….

 

Ajay

 

 

Posted on: 23rd Oct 2009