Banks don't want to lend money for buying assets that they know will be worth 25%+ less in a year from now.
When the average UK house price goes down to less than £100 K we will start to see the market pick up again. Until then, watch them drop faster and faster.

John, London, UK

To a new home buyer, what is the difference between a tax increase and a rise in house prices?! So a fall in house prices is a tax cut. Another 50% fall in house prices will be an even bigger tax cut, and help the economy grow again, as there will be more disposable income.

Hugo van Randwyck, London, UK

I concur with Daniel - potential buyers are now more savvier than the RICS and most other so-called guessperts...

cww, Ipswich,

It blamed the lack of mortgage finance for the lowest transaction levels in 30 years. What it should have said is "it blamed the lack of silly stupid mortgage finance." The reason we have sky high prices were silly loans. Let's get back to basic sensible banking.

Frederick, London, UK

Banks do not want to lend above 80% as they know that prices will fall again this year at least 15%

Thomas Mc Bride , Northampton,

Harry H, why would buy-to-let landlords 'celebrate' when their 'investments' are going to crash in value as well?

Paul, Coventry,

i dont want to buy yet property has further to fall, also when builders do start building again there land bank values will have fallen hence houses will be cheaper to buildlb

keith, dawlish, uk

Long story short - DO NOT BUY A HOUSE OR NEW CAR for another THREE to FIVE years. Save MONEY.

Uma Shankar, UK,

Adam,it was very easy to stop the bubble.(House prices and credit)
It should have been captured through inflation measures before Labour changed RPI to CPI to mask inflation.
Also could have looked at M4 levels again the Government removing to mask inflation.

Any 3 year old could have seen this

derrick robertson, aberdeen, scotland

This sure isn't reflected in asking prices. People can't be that hard up if they still want their 200% profit from the sale of their houses!

Hari, Hamilton, Canada

Of course its easy to say the govt should have stopped this bubble, but how exactly?
When they raised stamp duty then the right wing tabloids said the goverment was making your house price crash. If they told the banks to limit mortgages to 90% then thats interfering with free markets. No win.

Adam, glos, UK

If savers are not to receive a decent return on their investment, they may decide to purchase a buy-to-let property. This will of course mean the property market may move, however, it will also means less money for banks to lend. This surely cannot be behind this governments thinking. Its crazy.

Barbara, Hereford, U.K

I agree with Michael of London. A divorce meant I sold my house in 2007 and have been renting since, using the interest from my equity to pay my rent. Our Govt plan to keep those who borrowed way above their means sweet, means that my savings income has dropped to almost zero, so I'm trying to buy

Nick, Milton Keynes UK,

There is an easy way to increase housing transactions and make mortgages available... have house prices fall to affordable levels (average house = 3x average income). Buyers will see they are affordable and so will banks. The problem is the government propping up the bubble.

Phil, Welwyn, UK

homes should be valued at 3 or 4 x average wages, and not these high multiples that people cannot really live with. Just how will they be able to spening in other areas of the exconomy if they mortage debt is so high?

Kevin Davies, Kingston, UK

House prices are still being kept high by those unwilling to admit to fluctuating values.Reality is kicking in but slowly.When it does expect a deluge of undercutting and a glut of property being marketed as owners see their "investment" being devalued rapidly.Anyone selling now should think hard.

Dave, rainham kent,

For decades UK house market defied basic economics.
1. Too few houses - not enough built.
2. Houses used as personal hedge funds.
A (wrong) way to get rich.
3. Average price should be a multiplier of average wages.

4. Govt incompetence, not understand housing market

Leigh Vernier, Riyadh, Saudi Arabia

First time buyers aren't holding back from purchasing a house because they can't get mortgages; they're holding back because they know house prices have so much further to fall!

We're not proppping up this pyramid scheme any more. Let prices fall back to their natural level.

Daniel, Basingstoke,

It was because borrowers were able to borrow 5x income and 125% mortgages that the house boom went on and on! Now there has been a return to sensible levels and this should continue. Besides, anyone thinking of buying now should think again! This crash will go on and on and on................

sophie smith, london, uk

Most lenders will lend 3.5 times salary with 10% deposit. This is normal circumstances. House prices need to fall another 25% in the UK before most buyers meet this criteria..Banks want to lend but cant at current unrealistic property valutions.

des, Moscow, Russia

The prices have a way to go down yet to return to sensible sustainable levels where the winners are only the greedy banks, not the highly indebted owners and those who cannot afford to buy opr rent a home.

B J Deller, Marbella, Spain

The response to the current crisis is causing buy to let landlords to celebrate, with mortgage payments down and rents going up. Many buyers are going to struggle to come up with a significant deposit, as savers are being punished. What can the banks do with a further 20% price fall most likely?

Harry H, London, UK

More good news, lets hope prices continue to fall, but lets face it, you don't have to hope much as they will carry on crashing this year!
I'd expect 20%+ off any asking price at the moment.

Paul, Camberley,

I’m a potential first time buyer and I think I’m going to delay my purchase. All this bank talk of bubbles and toxic assets has really worried me. Basically if I buy a house now I’m buying a toxic asset that’s had its price overvalued for the last 10 years and every bit equity squeezed out of it. I think I would rather wait! I really don’t fancy negative equity for the next 10 years.

Lee, Hull,

I dont know where these discounted houses are. Its all repos and rubbish flats. I have cash. The houses i want to buy are still the same price they were 12 months ago. It needs another 12 months of this before people will accept reality. Some people still believe in a second half 2009 recovery.

Michael, London, UK

That's hope they keep falling cos there way overpriced still... I think this will be the end for high houses prices in uk for a very long time.... I moved to china back in april... life here is fast but much more comfortable in respect to living cost .Uk is a rip off! future looks grim there.

david , changsha, china

I believe that you buy a house with 20% down. If you don't have 20% down then your looking at a house you can't afford. 125% financing, interest only loans and adjustable rate mortgages got us in this mess and now you need to be on firm financial footing to get a loan. Can't get a loan on the dole.

Paul Bahre, Granby CT, USA

If the house market isn't going to be supported by mortgage lending, then the only buyers will be those with cash. They are going to want rock-bottom prices.
In fact, [prices] - [mortgages] = [deposits]. Expect your house to be bought for the 20% deposit........

Kevin Beach, Crawley, England

As a potential first time buyer, I've decided to wait until the recent massive houseprice bubble has deflated before getting my feet wet... Comes from a desire not to experience negative equity firsthand.

Hugh, London, UK