I could be getting my own place a lot sooner than expected

I always imagine that the letter that Mervyn King has to write goes something along the lines of:

Dear Government

It's your fault inflation is at 4%. Well done you idiots.

Regards
Mervyn King

I would continue to save for a while prices could still fall a lot further. The governments policies will cause huge price falls in some parts of the country. I would wait till the economy has stabilised. It is not a good time to buy now.

Oh, I know that

Woohoo!

+ several million

It is good for you as it increases your savings and drives down the price of homes.

and puts up my mortgage

Which shouldn't be a major issue as you will have factored in the very likely risk of an interest rate rise when you bought the place.

Yes bit over the last two years you really should have been seriously overpaying, because no one should have expected interest rates to be that low for ever.

OH have been - both the mtg and using some of the savings to pay off all other borrowing so now only have a mtg.
but SWMBO got made redundant and although have made overpayments from day 1 it only reduces the time - they will not let us reduce the payments without re-doing the mtg and with the rate we have thats not worth it

As long as you have used it to clear other debts. Sorry to hear about the other half losing her job. At least your other outgoings will have fallen.

They have and when we bought the houe the base rate was 5.75 so we know we can afford that - will just ahve to tighten the belts a bit

There's actually a certain logic to buying when the base rate is above average. Firstly it does tend to depress the market, so you can strike a harder bargain. Secondly you'll know if you can afford the mortgage in the beginning you'll always be OK, all other things being equal. Obviously losing a salary in the family always makes things harder but at least you'll know that your mortgage is never likely to be more than (x) so you can account for that.

Jon