Archie Norman, in an interview with this newspaper yesterday, said he thought that we were at the top of the equity market, before adding, “but it’s a long top”. The former Asda chief executive expects, to use his own words, blood on the streets in the share market eventually, but concedes it could be years away. There could be a prolonged plateau.

Investors and business leaders are having to grapple with the possibility of a “long top” in all sorts of asset classes and product markets. Bond investors are still waiting for a decisive turn in the credit market after several years of ultra-low defaults. Almost everyone agrees the market has to turn, with borrowers defaulting and prices falling, but the turn has been a long time coming.

Traditionally, asset booms turn to bust in the blink of an eye; markets overshoot and then reverse themselves rapidly and usually painfully. But not always. The plentitude of debt and liquidity has allowed the bull run in many asset classes to linger. The normal cyclical pattern seems to have been been stalled, for now anyway.

Nowhere is that more apparent than in the residential housing market, where many still hope that, never mind a long top, price growth will merely slow to a standstill before resuming its upward path in a year or two, when wages have caught up.

Bovis, the housebuilder, is hoping the slowdown is just temporary, that it proves to be a mere half-landing before another upward staircase. Its rattled investors aren’t entirely confident, however, as the 11 per cent slide in its shares yesterday testifies.

The sharp underlying fall in recent weeks in customer visits to show homes and in purchase deposits is strong evidence that interest-rate increases are starting to bite. Bovis is likely to miss its profits growth target this year.

Housebuilders are not as vulnerable to falling selling prices as they were 17 years ago, when the reversal in house prices proved catastrophic. Then they were overborrowed and undermanaged. Now their balance sheets are stronger and they are better at anticipating demand fluctuations – by shelving or accelerating projects.

Acute housing supply shortages, combined with huge pent-up demand, still favour housebuilders. But the next few months are likely to be critical. Prospective buyers, who are already pausing, will hold off still longer if they think prices are likely to soften, a spiral that would then feed on itself. The discounts, incentives and other marketing goodies being planned for the autumn by housebuilders may be enough to revive demand. But they would become self-defeating if home buyers were to sense that the balance of power was at last moving their way.

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