If you ever need evidence that we have never had it so good, just ask an economist. Despite yesterday’s announcement that Britain has just experienced the biggest monthly drop in house prices for 17 years, Fionnuala Earley, Nationwide’s chief economist, rejected the notion that things are as bad now as they were in the early Nineties.

This time around, she said, fewer homeowners bought at the top of the cycle, homebuyers have put down bigger deposits and more are now repaying the capital of their loans rather than just the interest. Consequently, there will be fewer repossessions.

However, while this may suggest that fewer homeowners will be forced to sell up, it does not follow that the fall in prices is likely to be less damaging. It could be just as damaging, but in different ways.

The pattern of decline then compared to now does suggest that this downturn might not be as pronounced. Broadly speaking, the boom that preceded the bust of the early Nineties was shorter and led to a much bigger percentage increase in house prices than we have seen in the run-up to this downturn. Average house prices rose by 41 per cent between the end of 1987 and the third quarter of 1989, from £44,355 to £62,782, according to Nationwide. Then began a 3½year decline that lasted until the first quarter of 1993, bringing the average house price back down to £50,128 and wiping out 70 per cent of the original gain.

Before the most recent decline, however, prices rose from the end of 2004 until the third quarter of 2007 by a much less dramatic 21 per cent, from £152,464 to £184,131. Although this might back up the argument that we should look on the bright side, analysts say that the scenarios are not really comparable.

In the early Nineties, it was a sudden surge in interest rates to about 15 per cent that forced many homeowners to give up their properties. This time it is almost entirely down to the mortgage drought that has persisted since banks stopped lending to each other after the US sub-prime crisis. There are 45 per cent fewer mortgages available now than there were in February. Because the credit crunch is unprecedented we have no way of knowing how the mortgage market, and consequently house prices, are likely to respond. Despite the widely-acknowledged boom, bust cycle, there is a view that while a pattern may look similar to one that has gone before, the causes will be different. While this inevitably leads to the assumption that next time will be better, it is always possible it could yet be worse.