In response to David Harrison from Grantham, you should consider the potential downturn in the economy generally (thats starting to look very likely), and the fact that average house prices are now 4.5 average earnings (according to at least one recent survey). House buyers, whether seeking to take the plunge or trade up, will only be able to do so if someone is willing to lend them the money, and then only if they can afford to do so. At some point (which looks to be about now) the affordability ceiling will be reached at which point house prices cant continue to rise as no-one will be able to afford the houses.

simon, manchester, england

Now there's a surprise!! - with all the doom & gloom being reported that houses are overvalued by as much as 40% it's a wonder that anybody is even considering moving or buying at the moment. People looking to 'trade-up' will be holding on to see how prices move and to ensure that they don't buy just as the market falls, those looking to get onto the property ladder wil be stepping back just to see what happens and maybe pick up a "bargain" so you just happen to get a 'slowdown' and a fall off in Mortgage offers.. House prices may fall a bit, but few will be willing to sell for a loss (unless they have to) prefering to stay put for a while. All this does is to cause a backlog which will result in a release of pent-up demand sometime in the first six months of 2008 and then the rules of supply and demand will take over, just watch out for an increase in house prices early next year as all these people wanting to trade up or purchase for the first time finally take the plunge.

David Harrison, Grantham, Lincs

BTL = Buy to Lose. The penny has finally dropped and there are no longer any buyers supporting the bottom of the market. Gordon "no more boom and bust" Brown will soon be clearly shown up as the economic incompetent he really is. The only miracle about the UK economy is that the house of cards has stayed standing for so long!

My main concern now is that Mervyn King is pressured to flush Sterling down the toilet with the dollar in a desperate attempt to bail out the reckless speculators. Hanky Panky Paulson and Ben "Chopper" Benanke have capitulated to the Wall St clowns. Merv needs to be a man and hold up interest rates or rampant inflation will eat the typical UK wage slave alive.

Pete, Leamington Spa,

Why call this "gloom"? Surely it is good news if housing becomes more affordable.

Justin Murphy, Luxembourg,

Kate Barker is also trying to introduce measures to INCREASE the cost of building and improving homes including a Planning Gain Supplement tax . If she has any sense, she will drop these measures.

Further, Kate Barker has forced through stringent new building codes. One of these is the Code for Sustainable Homes, which provides a "sustainability rating" for homes. Certain types of homes have to meet certain of these ratings, which is pushing up the cost of building homes considerably. Nice environmentally friendly idea, but let's face it - we can't afford it. These codes ought to be relaxed during these uncertain times.

Phil, Surrey,

Early this year, real interest rates were at an all time low and lenders like northern Crock were flooding the market with cheap funds. Much of this went into investor demand for BTL properties for which the only hope of profit was capital appreciation.

Investor demand is now vanishing, Therefore we have the possibility of a 1990s crash onto which is superimposed a further, much faster downturn at the lower end of the market.

The vested interests are all saying "It'll be a gradual slowdown." but the Chancellor's CGT change seems to me to be a last desperate throw to stop a mass sell-off by recent investors and those keen on gaining maximum capital return with taper relief.

As this crash pans out, it'll be interesting to see the excuses of the new economic kids on the block as they try and explain why they thought it had to be different this time. What they clearly refuse to realise is that whilst the economy is different, the character of the house buying public is just the same!

Alexander Davidson, Crawley,

I agree with Kate Corwyn broadly. However, there is a common misconception (usually amongst those that do not own a property) that a housing correction is not a 'bad' thing - this is only true to the extent that it is long overdue.

In reality, a price correction is likely to cause a fairly protracted period of hardship for the whole economy. Those rubbing their hands with glee at the current state of the housing market should be less smug. The broader economic recession that will accompany any 'crash' will create a new set of hurdles, problems and concerns for those who are currently unable to buy a house. I wouldn't count on being able (or even wanting to) rush out and buy a house. House prices may rise very quicky, but downward corrections typically take much longer.

I do agree that it is scandalous that the government has allowed the market to reach this point. But that does not make the prospect of any correction a particularly palatable process.

TR, London,

Kate Corwyn, Exeter. Spot on! A housing market correction will be very good news for the vast majority of people - who need to either get on the property ladder or move up it. It will be bad for a minority who had hoped to downsize and release equity (I can only think that these are the very greedy, as they've had ample chance to sell up in the longest property boom in living memory) and property speculators who haven't sold in time - that's why it's called 'speculation'! I don't know why words such as 'bad' and 'gloom' are chosen. Perhaps the Times readership is dominated by the minority categories noted above?

Clive, Sussex, UK

Anil Chatterjee, Bury, Lancs. I'm no fan of Crash Gordon's fantasy economic policies, but I don't think the government can be blamed for people's stupidity. I briefly considered buying a house a couple of year's ago which would have cost over 7x my income. I had a scheme worked out involving an interest only mortgage and had found a bank willing to advance the loan - then I came to my senses!!! It should have been obvious to all but the most stupid in recent years that the housing boom was unsustainable. In a free society people have to be free to act stupidly and make mistakes. It will be a painful lesson, but following the longest credit fuelled party in recent history we're now set to experience the biggest property crash most people will have ever seen.

George, East Sussex, UK

Anil Chatterjee, Your misunderstanding of how this works is obvious. If taxes where cut the demand for mortgages would increase and as supply of housing is fixed in the short term and only slightly variable in the long term house prices would be higher.

It is because of this Government that inflation is very close to its target and GDP growth is so high.

Thomas Jarvis, Southend on Sea, Essex

I graduated from University this year, and did not understand why our generation should shoulder the debt of the older generations who have squandered their 'equity' on luxury goods such as 4x4's and convertibles.

The hangovers will be severe and long lasting especially for those who drunk of the 'good stuff' with eyes bulged and mouths wide open.

I feel sorry for those people my age who desperately sought to get onto the boat before it left without them. If only they had realised that the boat can never set sail in theory, for if it does then it soon has to return to port to allow people on board.

The housing market of the last decade has been one large pyramid scheme, that the Government loved due to increased tax. The Government should really have been taxing BTL more heavily to stop the speculative investment, the pain now will just be that much greater.

The leading indicator has been the share prices of the house builders - lost 50% of their value since February!!!

Phil Ashford, nottingham, england

This cannot be true !! When Brown was Chancellor he told us endlessly that there would be ' No booms, no busts', that he would always be prudent and that he would take no risks with stability.
Meanwhile, outside his ivory tower in the real world, the economy has been built upon a mountain of debt.
It looks like the chickens are coming home to roost, Gordon.

Rick, London, England

Housing Gloom?! the one thing that we all need - a place to live - shows signs that it may be about to get cheaper, and this is BAD news??

If you're a buy-to-let parasite then maybe it is bad news, my heart bleeds for them.

Simon Stock, Meppershall, Bedfordshire

Surprise surprise! People who work in this country are taxed to the hilt, and house prices are so ridiculously high that the ordinary wage will not be enough to pay a mortgage. My 2 bed semi cost 1.8 years' gross salary in 1963, and there was tax reduction on the mortgage interest. Today the same house would cost well over 8 years' gross salary for a person doing the same job as I had then. This follows ten years of Labour's incompetence at the helm.

Anil Chatterjee, Bury, Lancs,

Please don't refer to this as something bad, we are in desperate need of a correction in the property markets. The real error was Gordon Brown's in not precipitating a correction several years ago when the effects on the economy in general would have been far less severe.

Kate Corwyn, Exeter,