The only relevant housing demand is that backed by cash.
Credit was to easy thanks to Brown.
The failure to include the cost of housing in the bogus cost of living index introduced by Brown meant that the Bank of England had to ignore the rocketing price of housing and kept interest rates to low.

James, Falmouth, UK

But isn't there a shortage of housing, which was the reason why prices were going up, up and away?....

Andy, Manchester, UK

Andrew - if you were running a business and could not sell your existing stock, would you invest tens or hundreds of millions in additional units, thereby incurring huge additional debt? Even if the banks would let you, your shareholders wouldn't.

Guy, London,

Do I understand correctly?

Builders can't make as much profit from building homes so they refuse to build any more, thereby choking of the chances of making any profit whatsoever.

Is that sound business sense?

Gareth Jones, Dusseldorf, Germany

Paul from Coventry, developers generally work on a 20% margin, how much profit do you think they make? What about the cost of land?

Read up on 'residual valuations'.

Tom, Reading,

When will the building companies learn that they need to lower their exorbitant prices? For the past decade they have been able to sell houses and flats for up to four times the building cost; now they are going to have to lower their profits to something more modest, like twice the building cost.

Paul, Coventry,

So new build has slumped what a surprise. Gordon Brown talked about buiding 3 million new homes, but that is all it turned out to be just a load of talk and no action.

The market will deliver the affordable homes that Labour never could because the banks have at last started lending sensibly.

Steven, Oxford,

Andrew, Builders have to borrow as well(credit crunch) and why would they build when they have no exit route (buyers)?
Why as a potential FTB do you believe you are entltled to help to make an asset purchase? Property grew 200% in the last decade guess FTB's just want their slice of the cake?

mark , surbiton, surrey

They fell by the wayside with all the other promises of a New Britain

dAve, UK,

If the banks had not made loans to people who could not afford to repay them causing rapid house price inflation,, house prices would have remained affordable.
Land prices would not have escalated, and builders would have been able to built affordable houses. We now have to wait until sanity returns

KW, Bognor Regis , ENGLAND

So housebuilders are now going to choke off supply ? A great way to keep house prices (if not profits) high and first time buyers are once again the real losers. When will this incompetent government, who seem to be totally out of touch with FTBs, intervene and come up with an innovative solution ?

Andrew, London,

What about all these 3 million new homes John Prescot promised.

Stephen Hulton, eure, france