Great article, great comments. Just another little niggle however. Many many people are employed by the pyramid scheme. Not just estates agents and Channel 4 presenters. The construction sector employs large numbers of people. Retailing all those fake fireplaces and spare room sofabeds, supplying and installing all that decking, insuring houses, selling cars or world cruises that add just a few quid to the mortgage. etc, etc adds up to millions more.

During the tax and spend boom - and how much of the tax was from stamp duty or inheritance taxes? - the public sector has burgeoned. And all the while the manufacturing sector has shrunk, and the factories have been knocked down to make way for retail parks and houses.

Where are we going to employ all those people who will be paid off when the music stops? We have masked the loss of what industry survived the restructuring of Mrs T. Where are the jobs?

David B, Larkhall, UK

Alternative explanation is: Let's make our little brother believe that the mortagage on his old terraced bought 2 years ago is noth worth repaying. Let's the prices plummet. Let us sell this very same terraced back to his son at another summit of the market. (The ide dawned upon me in early 2005, while I was searching ownership and price records for properties in poorer districts of Manchester)

Suav

Suav, Ipswich, Suffolk

Amazing how popular an article is when it says what people want to see. Fact is that a large percentage of BTLers like myself have no mortgage, so if property prices crash as you would like, we can buy more of them and meanwhile we are enjoying bumper rental income as more people prefer to rent than buy, i wont be cancelling the order on my the new car quite yet..

DJC, Ribble Valley,

Well written Alice. I long for some sanity in the housing market.

I had to sell my house when it became apparent that my youngest child had a serious medical condition and I wouldn't be able to work full-time and keep up the mortgage payments. I've been at the mercy of BTL landlords ever since. While I don't doubt there might be some decent landlords out there I've yet to come across one. Most are in it to make a quick buck with little regard to the people who look after their investments and pay their mortgages. Example: my little family will have to move within the next month, our second move in a year, our fourth move in three years. The rise of the amateur btl landlord has been disasterous for this country whether one is a ftb or a tenant.

Maria, Brighton,

How is it this government's fault that people were so stupid they didn't realise credit cards need to be repaid?

Luke, London, UK

Fantastically clear article and as far as I'm concerned a perfect description of the real economy!
But... although most people seem to agree with the statements made in the article, the (elected) government is stubbornly sticking to the opposite. With disastrous consequences. Democracy? Don't make me laugh.

Erwin, London,

Hello, just a minute lets just look at what is actually fuelling house price rises....no 1 is a shortage of land in these vastly overpopulated islands. no 2 is a dramatic increase in the cost of construction, resulting from increasing materials costs as resources run out (have you tried getting hold of quality building timber or stone lately? - just cant be had except at silly prices from the few suppliers left). Building regulations are making it more and more expensive to build quality homes (though they permit the construction of low cost modular housing that will be unlikely to last 25 years!). Add to that social changes and immigration and you must realise that in the medium to long term the only direction for house prices is upwards. Building flimsy modular homes and apartments isnt the answer...the only way you will keep prices down is by reducing the pressure of population increase. Can be done, but are there any politicians brave enough to say so - I think not.

mike napthan, Worcester,

A house costs 200 grand - my dream house costs 400 grand - I need an extra 200 grand to get it. I haven't got it. I sadly buy the 200 grand house.

House prices double. Yippee, my house is now worth 400 grand. Let's get that dream house. Oh dear, it too has doubled to 800 grand. To buy it I need an extra 400 grand. I didn't have 200 grand spare so I certainly don't have 400 grand so goodbye dream.

OK, lets back track, instead of doubling, let's say house prices crash by 50%. Oh dear, my house is now only worth 100 grand. Hang on though, my dream house only costs 200 grand now. Even after my loss, for only an extra 100 grand I can get my dream house ... might be doable.

Moral of the story - if you want a better bigger house pray for a huge crash, not a boom. Rising house prices are a curse for everyone except speculators.

James, Bath, UK

Without first time buyers there is no housing market, unless you are one of the lucky ones who can afford to buy more than one house, as first time buyers provide the first link in the chain.

David Leslie, Perth, Scotland

Ruth ... you and me both . Well Said !

Benzo, Nr Chelmsford,

No more boom or bust is going to cost us taxpayers dearly.

Edina, Oldham, UK

With a " housepricecrash " young people would be able to
gain some respect / dicipline through home ownership / renting
just like the old days...

Bring back the Bachelour pads & young home owners that my generation missed out on.

Tony , London, Middlesex

While all the muppets who believed that inflating house prices made them wealthier (forgetting that money on paper is NOT money in pocket) lament their gambles failing and being unable to sell off and gain the money locked in their 'investment' properties, I, a young person wanting not to step onto the 'property ladder', but to have a HOME of my own, to decorate how I please and not to be dictated to by someone else who takes my money to pay their mortgage, will wait. I will wait patiently, gathering a deposit as those houses snapped up by the greedy in the generation above me, fall in price, and then buy my home, with a decent deposit. And quite frankly, 10% mortgage on a 100K house = 2.5% mortgage on 400K house, cheap credit rates aren't that great if the prices are high!

Ruth, Hertfordshire, UK

Yes because eveyone in this country is a pathetically weak minded idiot who was dragged into the property market kicking and screaming.

PSF , london, uk

While we are all rushing to blame reckless Brown for this mess, have we forgotten who put him in charge in the first place? Tony Blair was his master for years, what did he do to stop the madness?

Ultimately though, it is the voters who are to blame....we put this government there, we reap the rewards.

Ken, Leicester,

Banks, homeowners, estate agents & credit agencies have all contributed to a 'feelgood' economic climate. This is not underpinned by sound economic principles eg. genuine 'added value' via manufacturing or Services.
Reality now dawns & govts. can do little about it apart from massaging the figures. G. Brown presided over this: 10 yrs. as Chancellor. Unfortunately, many young first-time buyers are in no position to witness previous recessions in the property market eg. 1990s & understand the concept of negative equity

Ian, London,

I put the reason for our current dire state to the pervading mediocrity in the U.K. Nearly everything is mediocre - government, businesses, financial institutions, services, etc. It makes me weep! If our politicians,the Bank of England, the Treasury, the FSA, the banks, etc. were only reasonably competent we would not be in the position we are in. Now, in effect, we, the public, are going to rescue the banks to get out of the mess they are in. Why should we? And is it going to work? I am not sure.

Douglas Shewan, Alton, Hampshire

I hope all this will finally put an end to all the tv programs telling us to how to make fortunes out of property.Kirsty et al eat your hearts out ..the boom is over and houses are for living in not trading...

mike, watford,

How dare Alice Mills expose the truth to Firstbuyers that they are being shafted.As a boomer I protest,we have got to gull these naive first time buyers in to hold up the inverted pyramid and protect my housing equity.

stewart, nottingham, uk

I am 35, 2 years ago I just could not come to terms with the fact that in 8 years of running my own SME in the UK I was only able to pay my tax at the end of the year - whilst my house, even after improvement costs, had made 13K each year on average. I could not see it as sustainable.

So I sold up, paid off all my debts and moved to the Czech Republics second largest City - Brno. I bought a stunning 1900 Art nuveaux appartment and spent 20K completely rennovating it with brilliant reasonable craftsmen. I experienced the most wonderful year of my life to date - free from debt and enjoying the best public services/transport - and a standard of living I could only dream about in UK. Even got married! The Czech Krona is up 25% against the £ since I bought - most of that this year as the UK BoE ramps up the printing presses to keep banks balance sheets healthy.

The flats now rented to a Chinese multinational at a great rate and am setting up an SME in India with my remaining equity.

Bob, Thiruvananthurparam, India

The article is overtly populist, expertly leveraging our blame culture and whipping up the whingers to deliver Gordon as the root cause of all evil.

We live in a cyclic economy and houses prices having gone up the curve will now come back down - it's gravity, simple as that. Now the horses are spooked, the last of the Greedy to jump on the bandwagon will tumble off and a number of unfortunate innocents will be trampled under hoof.

However, people need to start taking personal responsibility for their own actions.

pete, bristol,

I can't afford to buy my first house. I resent the money I pay in tax being spent on keeping house prices out of my reach.

Emma, Scotland,

"Anyway, we do love the Brits here.

Joseph Dobbs, Charlotte, NC.."

Thanks Joseph. And we like intellectual Americans as well. Norman Mailer, Henry James, Hubert Selby Junior, J D Salinger, William Burroughs, Gore Vidal, to name but a few... Bless you for giving us these....

Austin Tassletine , South West, UK

The property price crash -

The losers - Solicitors - fewer deals - lower fees

Peter, Burnley,

Why? there is always litigation and insolvency (and clearing up the property mess of course...

Alistairs Solicitors, Bristol, UK

The key to house prices is what the banks do when they get their hands on the money from the government bonds. If they go back to old fashioned lending criteria e.g. 3 times salary house prices are in for a massive drop. If, awash with money again, they go back to what we have seen in recent years 125% LTV and 5 to 10 times salary then house prices will not drop.


The amount of money lent on mortgages in March 2008 was only 17% lower than March 2007 - so what exactly is the panic?

Fred Sly, Elgin, Scotland

Using popn data from the ONS and the UK Housing Review (housing stock)...in 1991 there was one dwelling for every 2.43 persons. In 2005 this was one dwelling for every 2.31 persons. If we take 2006 popn data and the 2005 housing stock data (the latest), there is one dwelling per 2.33 persons (obviously houses were built in 2006).

What shortage? There are fewer people per property now than in 1991. More flats being built perhaps since then (rather than houses), but popn growth is via immigrants and they share i.e. their patterns offset English families becoming smaller (as VIs tell us that everyone is divorced and children don’t live with their families).

There are at least 10m people who are either unable to or have no desire to buy properties. The bulk of these are long-term unemployed/ on benefits along with their families.

Developer landbanks (with planning permission) are at record levels. Lack of permission is a red herring to protect margins. Immigrants are going home

Trevor, South east,

Agree James from UK now Brisbane - I live in London and work in Investment Banking. All the foreigners I know in London, which are plenty and the one of the main reasons why the UK financial services are so competitive, are taking their money abroad. Most do not want to stay or invest in the UK. If they have bought a property several years ago, they have sold it or will do so when returning to a world with sensible property prices, public schools public transport that function and a general cost of living well below that of the UK.

T.Andre, London,

James and Edrina,

I would advise anyone with a young family to leave this hole and brign them up outside it. The Buy to Letters will look after their own old age and sickness....

Austin Tassletine , South West, UK

Seems to me it's a question of supply and demand. More and more people chasing the same, inadequate number of properties. Apart from immigration, which has no doubt had some influence on the problem, there's also the explosion in marital breakdown and the benefit system which enables unemployed people and those on low incomes to occupy properties with rent and council tax paid for them by the local authority on their behalf. Nobody seems to want to open a debate on the so-called Green Belt. Most things seem to be adaptable in the light of current circumstances but the Green Belt seems untouchable. We can't have it all ways, can we? If the supply of housing was significantly increased surely the price would adjust downwards. This situation has been grinding on, to my certain knowledge, since 1970, when I first started thinking about buying a house. No government seems to want to tackle it and I suspect they have their reasons, but are unlikely to tell the electorate.

Brian, Watford, UK

The other scandal is the strategy to reduce interest rates in order to support the housing market, when all this will achieve is to make us all poorer as the pound falls and price inflation takes off. In any event the die is now cast for the unsustainable rise in house prices and interest rates cuts will have no effect.
All they will do is decimate the pound and cause more general inflation.
Not content with standing back and allowing hyper inflation in the housing market, the authorities seem determined to repeat the mistake by creating hyper inflation in more general inflation.

James, NI, UK

Brilliant article. Can somebody please explain how the government can justify bailing out banks when the banks are still in profit and still paying sky high bonuses to their employees? My friends in banking have been lamenting their paltry bonuses this year - only 5 figures, not 6 etc.

Nobody seems to connect the banks going around cap in hand with the bonus culture that remains...

And just to be clear, I'm not a City Boy/Girl hater who wants to see bankers suffer particularly. I'm a City Girl myself.

Sarah, London,

M.R- Dropping prices by 30% is only what market forces may determine anyway so it's a case of identifying the lesser of two evils, and not really a case of socialism or state intervention. We know that the vast majority of houses in London are not worth the bricks they were built with and that their value is at best speculative, and at worst, over-amplified.

Darren , Dartford, Kent,

Britain is no longer a desirable place to live. What sort of country is it where you can comfortably earn above the average national salary, and still not be able to afford more than a shoe-box, with a whopping debt hanging over your head. That was the position I was in, so I moved!

I now live in Australia, where you can actually afford to still maintain a reasonable standard of living. And I am surrounded by thousands of other like-minded Brits. When is the government going to realise that they cannot afford this brain drain to continue, no matter how many eastern european workers they cram in to the country. The UK will continue to lose some of its brightest people until it resolves these fundamental issues.

James, Brisbane, Australia

Just demonstrates how false the UK economy has been for the past ten years. No economy is going to survive if it has to rely on the increase in house prices or the building of new ones. Such policy is just not sustainable as it not creating actual wealth, a paper trail more like. Brown created the problem by not limiting spending, it just proves all his boasts about economic growth is an empty shell, which any second rate economists should be able to see through

Chris, Woodbridge,

Does this mean that people who dare to mention that house prices might go down (ie me for the last 5 years) will no longer be ridiculed as 'doom-mongers' ?

Christine Hassall, London, UK

This great glee pundits have about thousands of people in the property and financial industries losing their jobs

I thought industry meant work?

Austin Tassletine , South West, UK

I have been watching the housing market for the past 5 yrs. Meanwhile first-time buyers like me had to pay for other people's mortgages (renting), others are snapping up 2-3 homes. The government should regulate muliple home purchases. How does the government expect economic prosperity, when young couples or economically desirable people, are forced to live in overpriced rented homes/rooms the size of a kennel? Hence, the brain drain. I have moved to Hong Kong, saving up my cash for the inevitable house crash to happen so I can own a home when I return! Brown's government should look at examples of the excellent housing plans in Singapore and Hong Kong. Excellent public transport and affordable (spacious) housing, the masses live in decent-sized apartment/homes with a minimum of 2 bedrooms, 2 bathrooms and with low income tax. Brown's govermnent will keep on experiencing brain drain now and the future, if they don't wake up.

Edrina, Hong Kong,

Given the housing situation since Thatcher, building council housing to sell off at a discount was never an option. The right to buy seems to have left local tax payer's to pick up the bill and Its all a puzzle as to where the money the gone!

Arthur, London, UK

Whateve happened to personal responsibility? You want to lecture people about house prices, but who put a gun to peoples heads and made them sign the papers?

If you cant manage your own finances, its your own damn fault, not someone elses. Quit it with the mobile phone plans, the pissups at the pub, the plasma TVs, the cable TV plan, the big internet connection, etc etc etc.

Try a balanced budget, better yet, try saving some money instead. Get a loan with an offset account, and put money into that, and pay off the credit cards. Stop buying cars which depreciate like an anvil thrown from a plane.

For crying out loud, grow a spine, and take responsibility for your actions.

Roberto Maietta, London,

Fantastic article. Many more like this are needed to expose Gordon Brown's so called economic stability. The housing bubble has been inflated by all those with vested interest such as banks, estate agents, buy to let investors, etc at the expense of would be home owners, and now they expect us to bail them out!!!!

Grant, Bury,

35% Decline in Central Florida, USA. And more to come. That is what people in Britain have to look forward to. While you are watching your home price fall I suggest you read about the Tulip Bubble in Netherlands in the early 1600's.

Anyway, we do love the Brits here.

Joseph Dobbs, Charlotte, NC

The property price crash -

The losers -

The government - less stamp duty
Solicitors - fewer deals - lower fees
Estate agents - fewer deals - less commission
Downsizers

The winners

Everyone else

Looks like a good thing to me, providing the dopes running the country don't use OUR MONEY to bail out the banks/building societies.

Peter, Burnley,

The UK "economy" has been nothing more than a debt-filled-property-fuelled bubble for the past half-dozen years.

A bubble that had to burst sooner or later, bringing the whole "economy" crashing down.

Anybody but a fool could see it.

Those who could see it were saying so years ago and have now been proved right. A lot (myself included) got out while they could.

The fools, however, voted back into power the government largely responsible for most of the causes of bubble (uncontrolled immigration - pushing up demand, a laughable CPI on which to base interest rates - inflation is 2,5% eh? Yeh sure it is!).

Some of the fools have woken up, but some - even on here - are so stupid that they still haven't got it.

The unravelling of the Pyramid scheme that is the UK economy has only just begun. I wonder how far things will have to go before the more extreme fools "get it". Or whether they ever will. As most of them are clearly Socialists, my money (in Euros) is on the latter.

Jon Leigh, Southern, France

The typical output of a midle-class London journalist supported by her family. Alice Miles should realise that the property market is one of the few ways that ordinary people (those without degrees and connections) can substantially enhance their wealth. Shocking, isn't it? Ordinary people getting rich. Back in your places!

J Wilks, Boston, Lincs,

Roly
They were happy to see other people lose their jobs (and very possibly their mortgages and homes) through globalisation and offshoring, especially if it meant greater bonuses for themselves. Not forgetting the recommendation that companies should have an annual decimation of their workforce to boost profits.

Michael, Edinburgh,

Alice the thing is if the cost of living, and in particular housing, does not become more realistic we are facing losing hundreds of thousands of expensively educated and 20 and thirty somethings in the next five years.

As a homeowner myself I would gladly give up and gains for the long term stability of the country.

John, Reigate,

Good article, Alice, if a little late. Do you think that GB may be looking ahead with unusual realism, and hoping that if he can delay the housing meltdown, it might occur under a Tory government? Too cynical by far I'm sure..........

Richard, Carvoeiro, Algarve

I'm a little confused. Headlines blair: "Housing prices too high" and also: "Who's to blame for housing price declines?"

Trustin, Connecticut, USA

Fantastic article!!!
Thank you and please show it around your colleagues in the Times property section

Mervyn K, City of London,

While renting in London remains much cheaper than buying, any first time buyer seeking to buy is clearly misguided!

Olly, London,

Bit of an 'I'm alright Jack' attitude coming through in this article.

CFG, WGC,

The sooner people realize that spiralling house prices do not make everyone richer - because we have to live somewhere - the better. For many, climbing prices make you poorer, in real terms.

Who really benefitted? Well, people love to hate speculators and estate agents, but I don't begrudge them - the biggest culprit, and beneficiary, was the government. Inheritance tax, once a an inconvenience for the super rich, now routinely affects ordinary families, and stamp duty takes ever larger chunks of our hard earned money for the privilege of moving. And all the time the government stood mute, grabbed the extra cash and spent it like water.

Fred Sticks, Parpbeech, UK

"England is just going to end up like japan with generation mortgaes, we are an island too, so yes prices for new build homes might come down, and the odd bankrupt home here and there, but the rest of us will be sitting still the price goes back up."

You're right, Mr Jones: we will indeed end up like Japan, where the whole "generational mortgages" thing turned out to be a short-lived nonsense dreamed up during the great price peak of the late 80s and early 90s, and where real estate prices subsequently crashed by as much as 90%.

"Generational mortages" my eye. (Laughs.) Sorry, mate, if you were counting on ever-increasing house prices, I would recommend (a) reading a book on economics and (b) buying Tesco value beans for a few years. Enjoy. (Winks and slaps Jones on the back.)

John Mack, Aberdeen,

Excellent article - better late than never.

Why is housing NOT In the inflation measure by which Interest Rates are set?

All of the other arguments about property speculating and huge consumer debt etc. are correct, but they are a sympton of the main problem, rather than it's cause.

Last time I looked, housing was a key commodity required for living, and therefore a (the) significant cost of living. It's what everyone has to pay. Why has its cost been allowed to run away at a RIDICULOUS rate?

As was mentioned earlier, you can't live on cheap Ipods, Flat screen TV's and cheap flights to Europe for a lovely City Break Weekend.

The attempts to re-inflate the housing market, particularly trying to induce first time buyers with this shared equity nonsense, turns my stomach.

Gordon's Economic miracle is a sham, and I really hope he's hung out to dry at the next election.

If not, im emigrating.

Matthew Davies, Birmingham,

BBC News - "Brown to rescue lenders". You lose, first-time buyers.

JM, Tynemouth, UK

I came to the same conclusion myself. As a taxpayer I am being asked for money to prop up house prices at an unsustainable level. So my money is being used to prevent my getting the larger home I need at a reasonable price. Prices have to come down and the sooner the better. Then people will be able to get on the ladder. Present and future homeowners will benefit from this, only the speculators will suffer and serve them right! Their stupid greed has prevented people from buying their own home

p grant, brighton, uk

Best article I have seen in the Times for ages, about time.

john, norwich,

Excellent article. GB has a lot to answer for and will surely pay with his job at the next election.

As somebody who has been living in rented accomodation for the last 10 years I have missed out on the great housing boom and relish the prospect of prices comimng down to more affordable levels. So for me a house price crash is a welcome and long overdue relief, not a crisis.

Richard, Holmfirth, England

It's the bigest fraud for many generations, and now it seems the tax payers are on the hook for a HUGE RISK. Seriously after the next eletion anyone working can expect to get hammered as someone has to pick up the tab.

How is it acceptable, when it has "Moral Hazzard" written all over it?

Yoss, Fleet,

Encore!
A very insightful article - thank you!

roger, Tunbridge wells,

Quality, Alice. More please.

Peter, Lowestoft,

I'd like to see someone batter an eyelid. Is that like battering a Mars Bar, Roly?

Nick, Eastbourne, UK

Firstly - Fantasic article Alice - have you nipped round to Anne Ashworths desk to show her?

Secondly - Roly Surrey - No one really takes pleasure in people losing jobs, estate agent or otherwise. I agree the ones who really are to blame will be the ones with least to loose. - don't forget tthough, thousands of estate agents jobs will have been created during the bubble, so its only natual that they will be no longer required when this bubble deflates.

All the vast majority of people on here want is sanity restored to the housing market.

andy, Huddersfield, Yorks

House prices are relative. In real terms, most people will not lose any money, as the overall market will fall maybe 25% in the next 2 years.

However, I don't think Brown should be hammered for asking the Banks to pass on rate cuts to customers. Its a perfectly reasonable thing to ask. If they don't, there will a lot of people living right on the edge, over-mortgaged, negative equity, unable to remortgage, unable to get credit and manage their debt in a fashion they have become used to.

Brown is RIGHT to have a go at the banks for not passing on rate cuts. First time buyers will gladly trade a temporary loss on their first house for the opportunity to finally get on the property ladder, and the lower rates will protect many current over-mortgaged, debt-laden households from foreclosure and bankruptcy.

The behaviour of thebanks over the last ten years has caused this problem, but, unfortunately, the need to be bailed out, or it is PEOPLE who will suffer.

Mike, Beijing, China

"To most of us, the housing bubble has been an alarming, nonsensical boom that we have scrabbled to keep up with for fear of being left behind, not out of greed but because we wanted a home to live in, one that we owned.
For most of us, a sharp correction will come as a blessed relief." - Alice Miles.

Thank you - that is so true and yet seldom heard in the media.

One query though - you say house prices are six times an average salary? I wish! I though £20, 000 was the average salary, and the average house price nearly ten times that, much more in some areas.

Amy Allen, London,

If the Pentagon could deliver payloads with this accuracy the Iraq war may well have been a success.

Connor, Portsmouth, UK

This great glee pundits have about thousands of people in the property and financial industries losing their jobs is abhorrent. Thousands of people out of work means thousands not spending which means other industries feel the pinch and will have to lay staff off. Recession. What is possibly so wonderful about that? The people who will get hit hardest will be recent first time buyers and low income families who cannot repay their mortgage or indeed remortgage at all. The fat cats we all enjoy pointing the finger at won't batter an eyelid.

Roly, Surrey,

Why real-estate shock resulted in GBP currency loosing 17% of its previous value against Euro?? There is no reason because real estate is only a few % of UK GBP... Can UK BoE sacrifice its currency for greedy brokers and City golden boys ?

Michel Jutharat, Marseille, France

I could never understand why people got so excitied about house prices going up. My partner did the same thing - "wow our house has increased in value by £40,000 since we bought it" he enthused. "So what?" I said "so have all the other houses, including the ones on the next rung of the ladder". The only time having a big increase in value is worth celebrating is if you are elderly and have decided to downsize or move into sheltered accommodation, or if you have decided to sell up and move abroad.

The thought of house prices going down sharply is a bit scary, until you think about it logically and realise that the same will happen to everyone elses houses too, including that house on the next step of the ladder that you fancy. It'll be tough for those who have over-borrowed and will end up in negative equity, I'm just glad we were sensible and bought somewhere affordable rather than going for our 'ideal home', which would have really strethed us financially.

Sarah, Herts,

Alice, in listing the causes of high house prices you missed one - an extra 1.5 million people through immigration since 1997 has surely contributed to shortage and therefore price rises?

bruce burniston, swansea, UK

Alice, a great article with which I heartily agree. Trouble is it should be on the front page (as should Camilla Cavendish's yesterday)!
The wretched Brown should be insisting on prudent lending to try and get the housing market readjusted to a sensible level - otherwise leave the markets to adjust themselves. All this nanny state interference will just encourage the greedy banks to try it on again.
If you feel the need to have another go, please do an article (front page?) on this ludicrous insistence that inflation is 2.5%. Real inflation (ie that which affects every householder on a DAILY basis) is probably over 10%. You listed such items in your article today.
Kind regards
Philip

Philip Chapman, Greater London, England

Wow! Let's all bash Gordon!

Don't forget that when he was at the helm of the treasury Britain got through the last 'global recession' relatively unscathed. Given the situation is now tipped to be the worst since the 1929 crash, it's no wonder people aren't sure what to do. If the government didn't help the liquidity crisis by (temporarily - hopefully) taking dodgy loans for hard cash, then UK plc could really go down the drain.

And please don't think all of us 'City boys' are evil and greedy. Some of us are human. And certainly no worse than, as the article alludes to, and Penny points out, the many borrowers who lied about their income. Besides, can you name another 'global industry' that the UK currently enjoys?

Thomas, London,

I couldn't agree more with every last syllable you have written.

Stephen Clark, Boston, USA

The Governement for years have tried to make young people inadequite if they are not on the housing market. They have given people false expectations.

The media, both this paper and others haven't helped. Only now it is blindingly odvious do they start to critiscise Govenermnent policy on housing for all.

Let us not forget 190,000 immigarnts a year have not helped the demand for houses and the pressure to build more - another problem that is totally Labour's fault.

Scott, Exeter, Devon

Best article I've read for a long while about the housing market. Buying a house is the biggest single investment most people will make and yet its six times your wages, and we know most people have to lie to get a mortgage. Actually, UK housing prices are 45 per cent above what they should be - it's shocking! The British public have been played by a load of smooth talking-plum -in -your mouth con merchants . When are we going to learn? Your right, there needs to be a serious correction in the market and I mean serious adjustment. Those who bought the fancy cars and extravagant holidays with their pseudo equity, need to pay the piper, and not, as you said the taxpayer and first-time buyers picking up the tab. The housing debacle has caused untold misery: first economic migration. Most of us cannot buy in the areas we grew up in. Next, London is the most expensive capital the world. A fat lot of good that does us to have that infamy. Pyramid selling, I love it.

gezz, london, uk

Alice, you are a saint! Delighted to see this whole situation finally getting the attention it deserves in the media. The whole smoke and mirrors thing finally exposed for what it really is.

Trying to lay the liability for this shenanigans at the feet of the tax payer this week is really the final straw. Lets see him exposed for the muppet he really is, and hopefully sent on his way with a 'flee in his ear'.

Meanwhile, as for the house price correction: bring it! Whole generations have been priced out of the housing market due to unscrupulous investors, pyramid schemes and liar loans. Let us return to a situation whereby homes are for living in...not to increase the rich/poor divide. And if BTL'ers get stung into neg equity along the way....awww poor babys! :)

John, Isle of Lewis, Outer Hebrides

An excellent article- one thing missing though. Because house prices and rents have risen so drastically, the impact on inflation has meant that, in effect, housing inflation has cost us about a 25% increase in public sector spending because that is the extra amount that we have to pay public sector workers to live in crazy property land. So pretty much all all of the chancellors increases in public spending on the NHS etc has actually gone to landlords and those making money from houses. And he is trying to continue it!

ian n harper, franham common,

Mr W Jones.

Indeed, somebody who paid 250 k for a house is not going to sell it willingly for 180k. But the old lady next door who bought it in 1971 for 15k might, so might the couple next to her who paid 90k in 1996 in order to up-size.

Geddit?

Trevor, Romsey,

Superb article. However I would add that the root of the problem started when Lawson and Brown diminished pensions, which made people turn to housing as a one way bet pension investment. Buy to let was a cancer arising from this. Do not forget though that many first time buyers simply had to find somehere to live. They are the victims who deserve sympathy.

CW, Yarm

Colin Warburton, Yarm, England

From my point of view housing market is still good investment for pension.Yes,it will go down but overall in 20 years time it will perform much better than shares etc.
What is more for concern is the fact that people are loosing jobs-end result will be new jobs but with much lower wages.
Even if housing market go down,let's say 20 %-wages will go down too!
So,to get property will always be hard-in any conditions!
So start savings and stop spending £ 2.50 for cappuccinos is my advice!

Alen Radak, London,

Spot-on Alice.

New Labour are desperate - they don't want to lose the Feelgood Factor. Look what happened to John 'boy' Major when he lost it.

Prudent, more like pathetic!!

They deserve to fail.

Simon, Harrogate, UK

Perhaps you could now try and educate David Smith to whats really happening. Thats, of course, you can get him off Planet Zog. Oh, and if you could press him about when we are going to see the $40 a dollar barrelv oil he predicted.

les, plymouth, uk

I agree with most you say. I am 60, my mum and dad used to say, I dont borrow, I dont lend. At 20 I bought a £5000 house with a £4500 mortgage. I accept things have moved on and a mortgage is definitely necessary to by a house. If the present situation is to change, houses bought by investors and not occupiors must be controlled, remember 'rigth to buy' exploited by siblings? Along with this, certain less attractive parts of the green belt already bordered by development must be released. The green belt as it is currently defined and has been the same for the last 50 years and is well passed its sell by date and is only protected by existing home owners and consecutive governments who are frightened to alter it for loss of votes. Market forces, supply and demand, simple, when something is in short supply the price goes up, ie houses because no additional land is being released (green belt) to build them on. As my mum also used to say,"if things dont change, they'll stay as they are"?

George Green, London, UK

Thanks goodness someone has spoken SANITY!!
Its not all liquidity this, credit crunch, problems with the global conditions!!
House Prices have simply escalated way out of kilter - Simple!

Driven by wanton greed and freckless policy backed by Mr Prudent Brown who's now attempting to bail out the banks with taxpayers money and spin himself out of trouble - this is a monumental scandal and backed and propped up by the man in No10.
The massive correction needs to take place and in addition to this a correction with our UK political system - that includes the tories they're no better and have pretty much followed this insanity.

Mr F-Bahn, Beverley, Yorkshire, UK

totally agree it is not party politics or scoring points.House price boom was is an accident waiting to happen.It has not happen in France ,there you cannot borrow more than 3x your earnings.The banks should have acted more resposibility and so should the individual.Who's going to bail everyone out,the tax payer, as if we dont pay enough tax.
It is time that people realised that bubbles burst and that governments should take steps to avoid them.We need to invest in a better education and dispose of this celebrity culture that we have.Forget about shopping think manufacturing think exports etc

simon, london, uk

It is a bit rich of the tories to complain about Brown's policies since they would have caved into pressure from bankers very readily indeed. In fact they have lead the charge to 'get rid of red tape' and to 'allow the development of innovative financial products'.

Just a couple of weeks ago they were insisting that there should be no new regulation of the finance industry and they voted to make sure that post Enron style regulation didn't happen in the UK. It is also the case that they were claiming credit for the economy right up to the crisis as 'Ken Clarke's golden legacy'.

But they must think we are all fools with short memories.

As regards blame and complicity the media must be included - and it casts a light on whose interests get most voice in the media: my local paper met every rise in house prices with banner headlines shouting 'Good News - house prices up!'

There are over 5000 people waiting on the council list and rents approach 70% of local average earnings. Great news

Michael Murray, Bath,

once again, you're right, alice. and once again I have to ask what you were doing for the last 10 years when all of this was quite clear to various commentators (such as the economist).

were you suckered in by prudent gordon and now you've finally seen through him? "funny how you always get the answer right at the end".

jem, london, uk

The real problem here is that too many people see housing as a financial commodity instead of its real purpose, of providing a safe and warm place to live.
Am I the only one that seems to remember this fact?
I do not care if my house is worth more or less! I bought my house to live in! I bought my house to raise my family in and all the work I have done to it has been to make it more enjoyable to live in, not to increase its value.
We do not scream and cry when the new cars we buy lose money the minute we drive them off the forecourt. We do not buy a car and expect it to be worth more money in a couple of years time.

And am I also the only one that thinks that it does not matter how much the value of your house has risen, because the new houses you are looking at have risen by the same factor!

What I have thought is extremely stupid is the fact that people are now willing to pay £200,000 for a house that cost no where near that amount to build.
Like everything else in rip off Britain, if we simply just stopped buying then they would be forced to reduce the ridiculous amount of profit they make and charge a fair price. Or are we all too stupid and greedy to stop wasting our money for a while?

Gary, Rochester, Uk

Can we do it the Dutch way? They've just found that house prices are 30% inflated and have forced the price down. Literally "forced" people to lower them. Ouchie.

And THAT is a socialist classic, dear Edward Andrew.

M.R., Stockport,

Where have you been for the last five years as this bubble inflated. Funny how now the credit crunch is here everyone 'knows' that property is over priced and has to correct. It's been overpriced for years and a generation is either priced out or destined to manage mortgages of hundreds of thousands of pounds for the rest of their lives. This is the real scandal. Brown has presided over the biggest growth in consumer debt (and let's not forget a doubling of taxation) in history. He should be hung out to dry.

Hilary, Southall,

Couldn't agree more. When house prices are falling, shouts of "lower interest rates". When house prices were rising, not a murmur. The government and the banks are to blame for this tidal wave of spending through "misled" householders re-mortgaging to access their "wealth". The bubble has burst, time to repay debts. Despite the protestations of the BTL brigade telling us that the situation is sustainable, watch the bloodbath unfold over the next two years. I totally resent the government attempting to hold up an inflated market purely because it fuels a rotten economy. Prudence is needed! If anything is needed, after the 25% correction, it is a change in business rules that restrict banks lending more than three times an applicant's salary and changes to the tax rules that stop the BTL brigade getting tax relief on the interest charged on their mortgages. A house should be a home, not a vehicle for get rich quick merchants. Change the rules to make sure most houses end up as homes.

Graham Morris, Newark, Nottinghamshire

Give up, Mr W Jones. Your wishful thinking won't stop inflated house prices falling, or, reading between the lines of your post, your BTL portfolio losing money.

Alice Miles, a breath of fresh air from the Times. Sensible article.

David, Guildford,

Spot on! Remember though GB has a general election to fight in the next couple of years and there is nothing worse than a PM in serious trouble and sharp self-preservation mode. Best advice is to believe nothing of what you hear and only half of what you see from him and those closest to him.

T J, St Albans,

W Jones, Liverpool

New build-prices are not going to come down that much. They are determined by the cost of land, the cost of building, the affordable housing portion and any other planning gain obligations. The cost of building plots and planning gain are likely to fall, but unless the sums work out, developers will simply not build.

Down here in London, the Mayoral candidates are doing their bit to keep property prices up, by promising to maintain or even increase the affordable housing ratio, thus ensuring that there will not be much development going on. 50% affordable ratios worked in a rising market, but will buyers really want to pay twice over for a property just for the privilege of living in a new-build? Probably not, so the developers will just complete their current projects and concentrate on building up their land banks again.

Expect council tax rises too, as most councils have probably been banking on income from planning gain, which is likely to dry up.

Simon, London,

Considering Gordon was chancellor for 10 years he isn't very good at economics. If he subsidises first time buyers he will only serve to keep house prices artifically high.

The only thing in the short term that can make houses more affordable is a crash or correction that will force buy to let owners to panic and sell their properties at a loss. The problem with this is the negative equity that everyone will find themselves in.

I think Gordon knows exactly what he is doing by trying to forestall a house price crash by pumping more credit into the market, which he knows will put an end to his reelection hopes.

He (as has most of the media) have treated the credit crunch as an unnecessary financial phenomenon, some irrational fear that we all need to snap out of.

In truth it is necessary because the banks have so much bad debt that they need to recoup their losses and reprice risk. For the last ten years they have been underpricing risk, Gordon wants that to carry on.

Matt, cardiff,

Mr W. Jones is wrong. People might be reluctant to sell their house at £180K if they paid £250K for it; but they still might have to. This is because all those people who bought the same sort of house for £150K a few years ago, and thought it was briefly worth £250K, are now quite happy to sell for £180K.

I was in that position myself in the early 1990s, following the Lawson-induced boom of 1988. The value of my house briefly soared to £100K, but I sold it for £79K, which was still a "profit" on what I paid for it.

But what was the use of the profit? I needed to live somewhere, and it all went towards buying my current house.

No, the reality is that prices will fall; people will move less frequently for a period at least; but, provided Gordon Brown does not meddle, and leaves the market to its own course (a big "if, I know...), it will not be the end of civilisation as we know it. In 3-5 years, the market will be recovering again.

John Nicholson, Hampton, Middlesex

How stupid of the author to make such comments. One of the reasons our economy is so strong and allows us to live in a country like ours is because of the efforts of the City, and if they start losing their jobs, along with estate agents and others, the economy will spiral downwards into recession. How heartless to talk so dismissively about people losing jobs. I hope the author has a good pension in place, because most BTL's are decent hard working people who don't earn enough for a nest egg on retirement and who's pensions have let them down.

Boo to you for hoping for all these people to lose what they've worked for, which you perceive to be greed, so that you can benefit

jackboy, london,

Superb writing, love it!

Now when Gordo says "No more boom and bust" at least he's half right...

dan the man, londonshire,

To the commentators taking the opportunity to score party-political points against Labour: as much as I agree with you that our government has got management of house-price inflation badly wrong, I'd question the assumption that the Conservatives would have been any more forthcoming with the kind of industry regulation necessary to head this disaster off.

I think that there's a real possibility that the Conservatives will win the next election by promising entirely the wrong solutions to a genuine crisis, telling us the story that it all happened because of Labour's over-investment in public services, rather than because they were not bold enough to intervene in the market before it was too late. But after all, the last time we had a house-price crash was after a decade of Thatcher's welfare cuts, so boom/bust is not unique to this Labour government.

Blame the banks and estate agents which profit at the expense of society, and blame the government that does nothing to stop them.

BD, London, UK

I’ve being saying for years Brown’s built the economy on a pyramid of housing. He’s had his ego boosted by the bankers and everyone who’s pampered the man by agreeing he’s run the economy well. In the 70’s it was the union barons bullying by withdrawing labour, now its the city financiers controlling money supplies and blackmailing those we elect to look after our interests. Allowing bankers to protect their profits out of peoples misery is unacceptable, they should be told to take the losses like any small business would have to. I doubt Brown standing up to be countered; he’s probably already considering offers of a large fee consultancy job with a few of them.

Mike, Sheffield,

Mr Jones of Liverpool. I'll sell my house for 180 because the house I am going to buy was 500 but is now 360, sounds like a great deal. There will always be people selling up through divorce, death, moving for jobs etc and don't forget many people have been in their houses for 10, 20, 30 or more years so have made a fantastic amount of money even if prices take a big hit. They won't be postponing their retirement while the housing market catches up.

rob, bristol,

The current finacial problems are the result of more than just a property bubble brought on by artificially low interest rates. Instead of saving our money, low interest rates have meant that we have invested our money in property over the last decade or so, as a result we have very little real money available for productive investments (new business start up. research etc). Our savings have largely been wasted in the property market (malinvestments). A drop in the house prices is now necessary to correct the situation. The bare fact is that as a nation we are now poorer than we were. As anybody is if the choose to invest thier money badly. Only finacial prudence in the form of realistic interst rates (those deteremined by market forces) will help the economy to recover and build up a new capital stock. Lowering interest rate (borrowing money) to prop of the housing market is a sure way to destroy the economy.

Oliver, Cambridge, UK

Hopefully the young of Britain have just about enough sense not to be 'helped' onto the Property Snake. They've been sold nonesense for too long. I'm a clinical hypnotist, and I couldn't have done a better job myself!!

David, Birmingham,

Brown's attitude towards first time buyers is a socialist classic - hate those with more than you - despise those with less and scheme against your peers.

Edward Andrew Green, Upminster, e

Wow this is a bit hawkish from you, Alice, have you just received an income tax demand?

One group you fail to blame in all this are the newspapers - every week for years the Sunday Times has run articles on where the next buy to let hot spot is, where to buy a second home, how to manage your buy to let portfolio etc etc etc. Perhaps we should add a few thousand journalists to the city boys and estate agents you would like to see lose their jobs.

Ian, Chelmsford, UK

High house prices are not the fault of the credit market. There is a difference between solvency and liquidity. What GB is trying to do is increase liquidity so that those people who want to buy (at whatever multiple of earnings) can. We could of course curse the city "boys" (a bit sexist?) for finance and return to the days befure usury was allowed by the church . . .of course that means that we would have economic growth of about 1% per century, after the economy collapses and we return to an Agrarian society perhaps that could eventually lead to a feudal system. Stop whining, and pointing fingers - we borrowed and we are responsible for ourselves. GB is trying to help the economy, so that we have jobs to pay for our houses. It vexes me to say this as I have been intending to vote for D Cameron, but if GB pulls this off with this creative approach I'll eat my Haggis and forget all about the west lothian question too.

Matthew, London,

Glad to see someone standing up for the majority. 10per cent tax rate scrapped to prop up the banks what a discrace. Can someone tell Gordon Brown he's supposed to be the head of a Labour Govt not a Tory one!

Dean, Southampton, England

This just shows how far out of touch Gordon Brown is. First time buyers?! Does he think we are stupid? I wouldn't buy my first property now for anything other than a discount of 30% and anyone who does is a complete mug.

Morgan Stanley issued research the other day forecasting double digit drops in house prices and consensus estimates all predict falling real-term drops. Who knowingly invests in a falling asset class?

Z Smith, London, UK

Alice,

Superb laymans analysis of the deception that lies at the heart of "Nu Labour".the games up and "THE GREAT LEADER" must shoulder the blame as the principal architect.

The property market and stock markets must be allowed to correct without government interference to prevent hyper inflation in 2-5 years time.

First time buyers should avoid the property market for at least 5 years to allow the worst excesses of the bubble to get out of the system.

Peter sheer,Hereford

PETER SHEER, HEREFORD, ENGLAND

I am starting to wish for a coalition Government! The problem for any politician to introduce anything unpopular is that any long-term thinking is not permitted and this is also partly caused by a "Rottweiler" type journalism that would scare anybody off. I have long advocated cross party politics on green issues for example - where Cameron agrees in advance NOT to attack Brown if Brown introduced any given and commonly agreed policy to help protect the environment we are all ruining. But altruism or sacrificing something in the short-term for the longer term "common good" is not part of politicians' genes but neither is it part of the hysterical media. Alice I will exonerate you from this, your articles are often written in a thoughtful way. The link to the article is of course that on the back of "rising house prices" we have consumed like mad, destroying our natural world. If 30% of food really does get thrown away in Britain then I am afraid the price should increase by 30%.

Esther Phillips, Leatherhead,

My advise to those over exposed is buy a tin hat,the imminent crash is going to make 1990-92 look like a tea party.

Only first time buyers with no sense will look at the property market for at least 5 years.

Gordon,the games up!

PETER SHEER, HEREFORD, ENGLAND

Gordon Brown could have avoided the oncoming cottection/crash by not letting the bubble inflate. He changed the measure of inflation to the CPI which didn't include housing costs. He didn't take any action when lenders were offering 100%+ mortgages and 5 or 6 times salary ratios.

I'm glad I've sat out of this bubble, as I saw it coming 5 years ago.

As my father said: the best way to avoid a hangover is to not drink too much!

One last point.
Most buy-to-let investors weren't people from the city, they were teachers, cab drivers, middle management who believed the hype that it was the best pension. It will be a shock as the margin calls start coming on their interest only mortgages.

Tim, City of London,

People may wish to sit on their home till it reaches £250k again Mr Jones, but if interest rates were to reach double figures again and they couldn't meet their repayments, or if they were to become unemployed, then it's not their decision, but their bank's.

And the bank may decide that they need the liquidity that comes from cash, even if they have to take a loss, rather than sitting around waiting for their defaulters to start paying up again.

When a one-bedroom flat is three-five times the average salary, then it's clear that there is a problem. The sooner the market shakes itself out, the better.

Andrew J. Willshire, London,

Couldn't agree more. Lets hope this not-so-common sense spreads throughout the property-porn infested media. In one respect, there's no need to worry though - there is nothing Gordon or anyone else can do to stop house price falls continuing. The big sentiment shift has happened and it won't turn positive again for a long time.

On the other hand, prudent FTBs and other savers are left needing to run their own personal hedge fund to try and protect their hard-earned capital from rampant inflation, the trashing of the pound, and taxpayer-funded bailouts. Leave all your cash in a UK savings account and Gordon and the bankers are laughing... precious metals and Euros, anyone?

Pete, Warwick,

well said, I think you are voicing the 'silent' majorities view. Who ever started the rumour that rising prices were good anyway. Surely for the majority (people with only one home) rising prices are a bad thing.

Andy, London,

You lot jsut dont get it do you, people simple are not going to sell a house they paid £250l to you for 180k, they will sit on it till it is worth 250k again no matter how long that take's.

England is just going to end up like japan with generation mortgaes, we are an island too, so yes prices for new build homes might come down, and the odd bankrupt home here and there, but the rest of us will be sitting still the price goes back up.

Mr w Jones, Liverpool, England

Good article. Finally somebody voices what has been so obvious.

BUT fail to see what GB has to do with this: Interest rates are set independently by the BoE. And if he had raised stamp duty to an outrageous level to deter speculative buyers (as in Germany) he would still have been criticised then. The problem now is a mega-crisis. I suppose GB is trying to do what he can to avert what is going to be another US meltdown. But fair criticism for letting things get so out of control.

Mo, London, England

Excellent article. No reservations.

Please share with your colleagues.

harry e, London,

@Martin, Chippenham

When you learn to spell 'misinformed' we'll believe you.

miss informed? Now we know why you vote conservative.

Mo, London, England

Shame on you Alice. Of course everyone can now see Brown's economic competance was just all spin and no substance as he let everyone including the Government spend the wealth creation and taxes of the past 10 years. His cupboard is as bare as is his reformed the Bank of England and FSA incompetant.
Your shame is that whist you maybe in clover house buyers over the past few years face negative equity and lost savings so stabalised house prices are best for all not to cheer a fall and see our young people suffer as a consequence of being lulled into a false security by Government and istitutions

colin wagman, london, UK

Alice, I was thinking exactly the same thing yesterday. Labour are out at the next election.

Jon Kingsbury, Sodbury, UK

Excellent article - now if only we had an election coming up so that we could remind some politicians who it is that pays their wages (and expenses....)

Rob, Andover,

A very populist article and economically bizarre. Falling house prices impact consumer demand and in turn employment, perhaps Alice hasn't seen what has happened in the USA? Those same terrible bankers (I am not one by the way) support the jobs of a lot of low and medium paid workers. I remember when I was in branch banking regularly facing people crying in the interview room who lost everything, falling property values from hotels to pubs to houses were not helping - lower confidence means less spending and fewer jobs. Equally how logically can you say 'tough' to those remortgaging what part of 2 year fix didn't they understand and at the same time say first time buyers shouldn't be cruelly 'tempted' into housing, surely they have the right to make their own decisions too. This is part of the middle class angst that the previous lifestyle they aspired to (large house, 2 kids in private school) is now unaffordable.

Michael, haywards heath,

Ultimately, when the sheeple believe they are rich because the value of their property has increased x00%, they are more likely to spend - either on credit or on mewed cash taken out on the new jubbly equity in their house. When that security of so called wealth is removed will there be blood on the streets?

Also, what about the armies of so called property developers who, at least according to the property porn spewed out of the BBC and Channel 4 each day, have left their normal jobs to jump onto the bandwagon - will they suddenly have to be added to the tallies of the unemployed? I expect they'll all be very depressed about it all though so will be on disability instead. Marvellous.

Emily, London, UK

Refhreshingly straightforward and honest reporting of the property market from the times. Don't let Anne Ashworth catch you peddling this kind of talk, she's spent the last 10 years cheerleading the greed and recklessness which you rightly highlight. Although I note in recent articles she's started distancing herself from the whole thing and putting the blame squarely on the finance industry.

Andy, London,

Next set of Tory adverts should be the following:

Downing Street, slogan: "Prudence doesn't live here any more".

Picture of Mr Brown, slogan: "Whatever happened to no more boom and bust?"

John Scott, London,

Excellent article - at last the truth from the media rather than the usual "smoke and mirrors" spin from various vested interests.

Lets hope the truth about the "doctored" CPI inflation figure is exposed as we all eat ipods and dvd players for breakfast.

Mark, Hampshire, UK

I am from Scotland John Lee and I understand that lesson because it is pretty obvious. I gues that is you theory blown then.

John, Egremont,

House prices are far too high. We've all known it for years, whether we admitted it or not. If you look at the ratio of average earnings to average house prices, housing is at its most expensive it has ever been.

Of course house prices must fall dramatically and of course the government should not try to stop it.

Let's stop seeing a crash as a bad thing. Having affordable housing is one of the measures of a good place to live.

Even if house prices fall by 50%, they have still been an excellent investment for people who have purchased 10 years ago. Sure, the people who have bought more recently will go into negative equity, but that's just unlucky for them. They must learn a lesson that you should not buy what you cannot afford. It's time that the British public learned to save, not borrow.

Jake Brumby, High Wycombe, Buckinghamshire

Excellent article but where was the press when the great Ponzi scheme was growing? To me it’s a no brainer, if people spend more on their mortgage, they will eventually spend less on the economy once they have squeezed the final bit of juice out of the ATM that is their house, so in the long term, high prices no not benefit to you or I or the economy, quite the reverse.

That time is now.

Best thing you can do is send a copy of your letter to every Labour MP in the hope that one of them might actually take note!

Howard Banham, Fulham, London

Where were these articles a few years ago when they might have done some good? It's all very well wringing your hands now that the money is borrowed, the damage is done.

Rob, London,

The blame for this insane housing market rests firmly at the feet of banks for offering such stupid amounts of credit. Would house prices have continued to rise astronomically if we'd been restricted to 3x our salary in borrowings? Nobody would have been able to afford the ever rising price tags, had we been limited in that way.

Lenders have continued to hand out cash knowing full well that it was beyond the means of their customers to pay it back. I wonder if we're about to see another scandal about miss-selling mortgages, because I think some heads certainly need to roll in the financial sector.

If you keep offering credit, consumers will often take out credit to pay off other debts and simply snowball their debt. Yet the banks participated fully in creating a credit card problem too. Now the credit well runs dry, we'll see how few people were living within their means.

Donna, Middlesex,

House prices have also been pushed up because the government has allowed in well over 1 million people from eastern Europe and overseas. These people have to live somewhere and this obviously pushes up demand for private rented accommodation, council houses and houses to buy.
New council houses have not been built because the government is deluded and believes half the population will go to university, get a highly paid job and then buy the house they need without any problems.

Kevin Herbert, Greater Manchester, UK

Well said! You've voiced my thoughts.

I have been so disappointed by Gordon Brown - I genuinely thought that NewLabour would be a force for the good when they came to power. However, we've ended up with a bust economy, built on the sands of runaway borrowings, and a PM scrabbling round to avoid the correction in house prices that is well overdue.

You should have stopped it on the way up Gordon. Now is not the time to try to do something to protect those who over-borrowed in the hope of making a tax free gain, at the expense of those of us (who are greater in number) who stayed within sensible limits.

Janet, Surrey,

What Gordon Brown and the Bank of England do not seem to realise is that the y are effectively sanctioning systemic fraud and deception. The basic cause of the credit crunch is the breakdown of trust and confidence in the financial system and no amount of shenanigans and interest rate cuts will fix it. Instead of restoring this trust by cracking down on the errant banks and credit rating agencies, the US and UK government keep coming up with more and more outrageous schemes and lies. However the comments here show that there is hope: the people are beginning to see through the smoke and mirrors.

anthony, london, england

The fall in house prices is not causing me one single sleepless night.

What is giving me sleepless nights is the rise in inflation, especially fuel prices. I am being cripled here. I would like to see interest rates going up, not down.

jeremy, hassocks, sussex

I have read many comments on articles like this one, and am amazed how nearly always there is a lack of support for the government, does this mean that on the 1st May Labour will not receive a single vote, of course they will. Unfortunately voting for Labour is what the non thinking, miss informed do. They have done for years.

Martin, Chippenham, England

At last, someone in the media who sees the truth and is not afraid to say it.

Mark, Belfast,

Alice,
its seems that you have struck a chord. During so many years in which house prices seemed to defy the laws of economic gravity those of us who felt the situation was unsustaiable ended up feeling as though we might be slightly potty. Look at the income to house price ratio we said. 'But it's different ths time' they said. 'There's a housing shortage - immigration don't you know.' After a while of feeling like a lone voice one is tempted to give up and join the collective madness, if only for a bit of company.
To borrow a Buffetism we're about to see a lot a people who were swimming naked. One of them I suspect was Gordon Brown. Ladies and Genlemen, for your own sake, you might like to avert your eyes now.

Jonathan, London,

Good article. GB and AD are desperately treading water in a whirlpool going down the sink (hopefully). As one of the priced out generation I have sat back and refused to fund this incredible show of greed and incompetence. I was not brainwashed by all the articles and shows that were fuelling this setup. Wealth transfer via huge debts from young to old to fund equity release (more debt) and more temporary spending. Nothing more than a last temporary fix for a twilight economy totally sold out. What a shameful setup we were supposed to finance - fortunately many are now coming to their senses.

Richard, Guildford, Surrey

People aren't that dumb. They've seen the headlines. Noone will pay the full price for property that may be worth a third less in a couple of years' time. That in itself will hasten the collapse/stabilisation (choose your own term). Good thing too for everyone apart from the speculators who were always 'breaking the ceiling price' for the area when flipping - and who cares about them?

MD, Varna,

Have you run this past Anne Ashworth?

S.Ossij, Birmingham, UK

Gosh - is it really a surprise that the economy is in a mess after ten years of a labour government?

I'm really disheartened by the fact that for so many years that journalists in this country have made very little of some very real criticisms levelled at Blair and Brown's handling of the country and economy.

Good article, but like your criticism of Brown, it's really closing the stable door after the horse has bolted. But I suppose it makes better news now we all face this crisis

Duncan, Wokingham, UK

As someone "stung" by "abolishion" of the 10p tax band, (a lie), immediately recognised when he said it a year ago, i.e. earnings well below £18.5kpa, my Council Tax up 5%, water 10%, gas & elec min 15% and the sky's the limit, most things in Asda up 20%, my small beer, & few fags, & motoring more heavily taxed, I find it difficult to understand that I'm better off with New Labour. I vaguely remember some woman, whose name began with the letter T, who had a thing about a Mr. McAwber, £1-0-6d earned, 19/6d spent, happiness; £1-0-6d spent, 19/6d earned, misery. My parents taught me that lesson; pity the Scots didn't teach their kids the same.

John Lee, Ellesmere Port, UK

Desperate to be re-elected he'll promise near anything. First time buyers are there merely to be gullible to prop up his consumer bubble.

Oh and then there are the Private Equity people that are getting restless.

Good article Brown is truely a member of the ME, ME, ME generation.

Damian, Brighton, UK

Good article. A one bed apartment in Bushey [middlesex] costs about £125k, in harrow [London] £10k more, whilst in Brixton, it will set you back £185k (these are average figures). A one bed however in Kensington, Sloane Square, Chelsea, Nottinghill, Mayfair, Knightsbridge and parts of Belgravia \ West End \ Battersea (call them the "posher postcodes") costs a whopping £650k to 750k. Posher postcodes, are now "no go areas" - not in the sense we normally know it - i.e. voilence mugging, robberies so people are afraid to go \ live there. Posher postcodes are no go areas [to even middle class people] because ordinary people cannot afford the ludricious property prices in those areas. I never agreed that posher postcodes would become no go areas for our children, that such areas would be occupied exclusively by the Russian mafia, the masters of the universe (aka retail \ investment bankers, equity and commodity traders) etc. Labour and Gordon Brown let us down.

Rebecca Dawson, London, UK

Brown's incompetence was exposed from the moment he sold off the nation's gold for a pittance. And if that wasn't a big enough warning, the manner in which he bankrupted the nation's pension funds should have been. Yet the accolades continued to roll from this and other newspapers over his prudence and expertise in managing the economy when all the time it was tax and spend and save nothing for the hard times which would surely come. Well the hard times are now upon us and Brown and his cohorts are running around like headless chickens. It's too late for him to blame the last Tory government. Isn't it?

Callan, Liverpool, England

You are absolutely right. Thank goodness there are some honest people left in the media. The "housing market" has not been a "market" at all: For years and years it has been nothing but a pyramid scam - where the only way on/to "buy" a house has meant you have to lie about your income and pretend you earn far more than the average wage: THAT is the only way you can "afford" current prices. It is a total disgrace. The banks and lenders have been thoroughly unscrupulous and allowed this to happen. Liar loans and silly multiples of salaries have been the norm - and now we are reaping the consequences. We need house prices to come down by a very large margin - and then stay that way so that ordinary people can afford to house themselves in a responsible and honest way. People need to face the facts - prices need to come down mow, and liar loans need to be firmly stopped

Penny, Somerton, UK

Excellent article. There's no place to hide now for Brown. His fingerprints are all over this crime scene and the credibility that he built up as a "prudent" chancellor has been shattered. The thing that annoys me most though is that those who were really prudent over the last ten years are going to suffer now with the slashing of interest rates. Inflation is going to be used as a tool to wipe out the debts that this country is sinking under.

James, London,

Excellent article. Thank you for voicing an opinion held by so many in this country who have looked on aghast as we priced the next generation out of home ownership and sustained a false economy built on massive debt. Shamefully, as the housing/debt bubble is about to deflate, the government is trying to intervene by re-inflating the bubble. If they succeed it will only delay the inevitable and not allowing the housing market to correct itself now will mean more pain later. Shame on you Gordon. Shame of you Alistair. Shame on all of us for voting this bunch of so-called socialists into power.

Raj, Wolverhampton, UK

How dare he indeed? Could it be that he is emboldened by the vacuity of the opposition? Where are the radical ideas, the leadership, the vision and the *values* that we need to begin excavating our way out of the mess New Labour have made?

H Thomas, Llandeilo, Wales

Some of us have been saying for years that Brown was spending too much money. He kept boasting about all of the years of uninterrupted growth (forgetting to mention that 5 of them were under the previous government) but throughout that time he kept public borrowing high. What makes it worse is that so much of it has been wasted through Brown pet schemes such as the spectacularly expensive and wasteful PFI contracts.

In America they are cutting taxes, they are doing the same in Spain where they have had a similar property bubble. Here the government is raising taxes, it is even doing so for the very low paid. It's a strange kind of prudence.

Paul Owen, Birmingham, UK

I completely agree. We need to deflate the pricing bubble as gently as possible. The last thing we want to do is desperately try to find some way of keeping the bubble growing. If we do we will face an even bigger problem when it eventually bursts. House prices are just not sustainable at this level. We need to get back to a more sensible house price to earnings ratio. We need to sit back and let the prices fall and wages catch up. Some people will have problems but it is a lesson we must all learn

Unfortunately Gordon Brown keeps pretending to be prudent when in fact he has been acting irresponsibly for years. He now appears to be on the verge of being totally reckless with taxpayers money.