The Bank loan books are not trusted. In a downturn of a business cycle the Banks have to remove bad debt. That cannot happen until the house prices reduce by another 30-40%.

The government has to force a quick devaluation of the housing market. Better than years of slow drip downwards.

Vik, London,

Keep hold of those savings - the various markets go up as well as down... What's 6% APR from a bank each year when the stock markets move 10% in a day... And houses will rebound eventually courtesy for Labour's false markets... Benefit from other's mistakes.

Bart, London,

Hugo - quits simply because one is an asset,contributing to the accumulated wealth of the nation, the other is a cost which pushes up inflation. The effect of that is to erode the value of the asset value in equivalent spending terms. Not the same. Not by a long chalk!

Geoff Harrison, Beverley, UK

If you think house prices are dropping fast now just wait until next year when the effects of company liquidations has an effect on unemployment, this will lead to a spiral in forced house sales , then you will see a real housing market crash...

Peter Rogers, Rushden, UK

Another 30% fall? Another 50% fall? You wish! Mortgages are about to become a lot more affordable, enabling people to stay in their homes and stabilising the market. You'll see the martket turn next year.

Phil, London,

The only way to stop this ridiculous cycle of house price fluctuation is to stop the 'investors'. People with more than one house should be discouraged by huge taxation. Houses are for living in not to make profits on. Its a basic human right.

Chris, Banbury,

They still have @ least 30% to go "Downward"! Look @ Average Earning's! Bovis & Persimmon et al are in "Cuckoo Land"!I drove past a "Bovis Development" in Denton last Friday, 31/10/08, No letting''s,but 1 B/rm Flat £92K, "Inc Carpet's"! Carpetright Can't Give their "Carpet's Away"! Real Price£40K!

paul, manchester, uk

Where is the common sense?
When house prices go up it is good, and when petrol goes up it is bad!
And,
When house prices go down it is bad, and petrol goes down it is good!
House prices going down is wonderful news!

Hugo van Ramdwyck, London, UK

It's a vicious circle that will pull prices down whatever the interest rates are, as the huge problem is that banks will not lend the multiples that triggered the bubble in the first place. Once we reach 3.5 x average salary deals will start to go through but not till then. Another 50% to fall.

Bruce, London,

Looks like the government are still striving for the dream of ever rising house prices. Which poor soles are going to step forward to take on the massive dedt burden required to buy a house and keep the property industry going? What a false market this is.

Chris, Chipping Norton,

Ian, newark, that's exactly my point your first house was worth 2.5 times earnings, which was affordable sensible lending by the bank. Neither you or the bank went bust. In the last couple of years, lots of people have been borrowing 5, 6 even 8 times earnings, now they are bust and so is their bank

richard, brighton,

Do not compare house prices to average earnings but to mortgage costs.

My first house in the 1970s cost 2.5 times earnings and now could be 4-5 times.

However, with much lower interest rates nowadays the real mortgage cost is not much different.

ian, newark, uk

Frank is right: the prudent are paying off the wastrel's bills. We all suffer when the quality of the population declines.

steve, london,

To revitalise the housing market the Chancellor MUST reduce stamp duty from the 3% and 4% levels down to a flat rate of 1%. Most people living in a reasonable size house south of the wash cannot afford to have between £7,500 and £15,000 added to the cost of moving house.

Mike Capay, Royston, England

i agree frank, if the interest rate goes much lower i might as well transfer my savings under the mattress. thats what you get for being careful and prudent.

tony, newcastle,

Frank, Plymouth, I disagree. Interest should be cut to help sensible people start buying their homes again. The amounts and frequency the banks lend at must be very tightly regulated by gov to make sure everyone can afford to pay back what they borrow. simple.

Chris, Preston, UK

House prices vs average earning ratio is still running at 4.92%, and thousands are being laid off every week. People cannot afford a house on PAYE income alone. Houses are still massively overpriced compared to earnings, interest rates can be cut till the cows come home, it won't make a difference

richard, brighton,

Sorry to contradict Frank, but the value of a retail bank depends not only on its deposits but also on the value of its loan book. The value of a loan book depends in part upon the value of the properties it has lent against, and the ability of its mortgagors to pay. Reposessions aren't good news

Guy, London,

The value of a Retail Bank depends on the deposits made by people with savings. To cut interest rates to support more irresponsible lending just to get the Government off the hook devalues the deposits made by those who are not borrowing recklessly. Interest rates need to go up, not down.

Frank, Plymouth,