Mr King may not yet be the fiscal equivalent of Paul McKenna, the self-help supremo inducing instant mental changes. But he may have been following some of McKenna’s advice on positive thinking recently in this newspaper.

It is said that the Bank would like to see house prices advancing at the same rate as earnings, that is 4 to 5 per cent a year, about half the average nationwide increase in 2006 (although that is a target that would never be publicly acknowledged). To meet that goal, there could be another, fourth successive upward move in base rates to 5.50 per cent in the next few months — to curb surging inflation as well as cool the housing market. A similar tactic proved effective in the past: between November 2003 and August 2004 the Bank ordered four rate rises to moderate the pace of property appreciation.

Meanwhile, even if the threat of more expensive borrowing is only Mr King playing mind games, it has already had an impact: anyone whose two-year 4.49 per cent fixed-rate mortage is coming to an end is likely to be offered a deal closer to 5.34 per cent.

Homebuyers who today are feeling mildly resentful over the Bank’s actions and minded to call Mr King a party pooper have short memories. Just weeks ago most pundits predicted higher interest rates and a market slowdown in 2007, with buyers feeling the pinch from higher fuel bills: the nation is now paying £8 billion more for energy than in January 2004. Martin Ellis, of Halifax, estimated that prices would appreciate by an average of 5 per cent; most of his more optimistic peers put growth at 7-8 per cent.

Those forecasts of a more muted mood in 2007 are now coming true — only a little earlier than expected. Indeed, research from the Royal Institution of Chartered Surveyors shows that the market was already starting to lose some momentum in December.

There are no signs, however, of demand abating in Central London, where the ardour of City bonus recipients for status homes is unabated. A £7.5 million house in Kensington went on sale on January 2 through Cluttons: there have already been no fewer than 66 viewings. Energy costs are already subsiding, easing pressure on inflation and thus the need for rate rises. Let us hope that Mr King and the MPC are less focused on the state of the market in the capital than on the much more subdued conditions in many other parts of Britain.

THE CLIMB FROM CRIME

The story of North Benwell, a Newcastle upon Tyne suburb, is a heartwarming tale of how a rundown area of a city can be regenerated. But it also has something to say about the prospects for buy-to-let investments. After riots in 1991, North Benwell was the very model of the boarded-up, crime-ridden urban locale. In 2000 a housing association sold off some of the worst flats to families for just 50p each. The buyers received grants of £26,000 but were asked to invest £12,000 each to turn the properties into houses. Today some are valued at £145,000, reflecting North Benwell’s recovery. It may not be exactly a desirable suburb but, neverthe- less, there have been significant improvements.

Some of the beneficiaries of the area’s renewal and its quite extraordinary price appreciation have been buy-to-let investors. But Edward Watson, a local chartered surveyor, now wonders whether that group of buyers will be so keen to commit funds in future. This week he valued a North Benwell house at £115,000. The rental income on that property will be about £400 a month, a return of about 4.25 per cent, lower than the new higher cost of borrowing. Buy-to-let investors in other parts of the country will be doing similar sums. Those who are principally interested in capital growth will shrug their shoulders. But, with rents remaining largely stable, those who are looking for an income from their properties will begin to wonder whether the sums work as well as they once did.

BATTING FOR ALFONZO

For this week’s extraordinary American home treat, let me take you to Little Neck in Queens, a borough of New York. For sale in this not usually upscale nabe (neighbourhood to you and me) is the home of Edgardo Alfonzo, a former player with the Mets baseball team. It has recently been reduced from $8 million to $6.5 million. There are five bedrooms, six bathrooms, a hot tub and lots of onyx. The special feature is, however, a batting cage — in the Mets’ blue and orange colours. Curiously, Mr Alfonzo never himself moved into the property. For more, see the realtor’s website (www.danielgale.com).

Explore Property

• Buying & Selling

• New Homes

• Overseas

• Interiors

• Investment

• Gardens

• Specials

Times recommends

• Analysis: frustration for everyone - except investors
• Spanish property: why it's crunch time on the Costa del Sol
• Buy-to-let: professional investors cash in on the credit crunch