"Surely, people had more commone sense than to think they could go on living in 'never never land' forever? ...Marita, Mulhouse, France"

No. That seems to be the odd thing about property. People get very excited when they see a paper profit of (say) 20 percent per year.

They don't bother looking at the fact
a) the house they couldn't afford when they bought their current one is even further out of reach,
b) they're getting more and more indebted as the price multiples go up and up
c) the pool of people they can sell to shrinks as the multiples go up and up.

As they say - the only thing that history teaches is that people don't learn from history.

A crash - or price adjustment - has to happen. It'll be less painful if it happens sooner rather than later

Clive, Surrey,

Buy to Let has distinguished this property boom from previous ones. The trouble is, the UK loves buying - which is partly why we have so many new landlords - and there simply isn't enough rental demand, particularly for flats. The phrase "Britain has a property supply problem" is not true in a pure demand sense. If there was a problem, rents would have risen like prices.

There's a house near me in Cheshire up for sale or rent at £220,000 or £625 per month. With a 10% deposit and a 25 year repayment deal this makes buying roughly double the monthly cost of renting. If that's not a sign we're due for a correction I don't know what is.

We now have (1) oversupply of rental property which will start to drive landlords out of BTL (particularly flats) (2) a decline in confidence which will keep potential buyers out of the market and (3) tightening credit which will force repossessions for remortgagers too.

To all buyers - stay put and help speed up the correction!

Sam C, Manchester, UK

I notice that the land registry figure for the average house
price is roughly 10k more than the Nationwide.

What was that ELO record called..... confusion. !!!

Its got me, besides the Estate Agents have just put their annual 10% on everything, around here.

M walker, Nr worcs, worcs

High inflation hid the magnitude of previous house price falls.This time ,with low official inflation,any falls will be clear for anyone to see.The UK has never entered a recession with cinsumern debt at 101% od GPD.We are entereing a completely unknown situation which makes things very gifficult to predict.My prediction for what its worth,a 50% fall in house prices by 2012.

stephen hulton, eure, france

Anyone who is considering selling property for profit in the next 10 years needs to look to sell ASAP. Those quibbling about taking offers 5% below the asking price will have to take off 15% if they wait until end 2008

Housing slumps historically take 30-40% of the REAL value of property. The popular maxim It's different this time, is starting to sound increasingly like denial these days.

A Harris, Kettering, UK

'Fears' of a correction? For my generation, read 'hope'.

Matt D., Southampton, UK

The result of persistent subliminal inflation associated with the housing market, fuel oil prices and defence spending leaves us with a pound that in real terms has the spending power of the US dollar, Not a good position as the US Dollar is now being challenged by the Euro which itself appears over-inflated..

Robert El Cid. , Hull,, East Yorks.,

What do you mean "weaken"?

The right term here is "adjust" - drop down to sensible levels after ten years of massive inflation the Bank of England ignored as if it wasn't, in fact, inflation.

Just 4 months of slowdown after this heinous long term rise is nothing to get excited about, but it's promising.

Joe, Manchester,

No Hassan house prices really have fallen 4 months in a row. In October they hit a peak (according to Nationwide) of £186K and now they are down to £179K. It's part of the positive spin from the Nationwide that this £7K fall has not been commented on. In a couple of months the annual rate will also go negative (and if you account for inflation it already is). Falls of between 7-10% (Dec 2007-December 2008) are looking almost unavoidable now - and thats before the US recession (which will surely go global) is factored in.

Andy H, Nelson, NZ

I'm always entertained by how little people understand house prices. There are two sides of the houseprice to the average home buyer (who will be getting a mortgage). One is the price of the house - this is in fact the less important factor if you are getting a mortgage. The second is the rate of interest at which you can borrow. This is far more important to a mortgagor with a significant (more than 50%) portion of his property being mortgaged. Due to the increase in mortgage rates it is misleading to refer to housing is becoming more affordable. Even with the drops over the last four months, someone who could only just afford to buy a home for £100,000 four months ago cannot afford a £90,000 house now. due to increased rate spreads So of what use is a house price decrease of 0.1%? None, is the simple answer - in real terms house affordability is rushing out of the reach of Britons at a faster rate than it was a year ago

Abioye Oyetunji, London, UK

Hassan Azam

Er no, house prices are 2.7% higher than 1yr ago, but peaked last Autumn, since when the prices have been heading lower. So month on month prices are lower, but year on year, still higher. Therefore even if prices were to stay flat for the next few months, we will see negative year on year growth. Simple, eh!

Rob, London, UK

Economics 102: when you raise cost of capital (i.e. interest rates) asset prices fall
Economics 103: number of buyers are always = number of sellers (I know of some con artists trying to sell the same house to two different buyers, but let s not get there)
Economics 104: house prices have fallen 4 months in a raw, that is correct, while the 12-month trailing inflation is declining but still positive due to the strong gains in the first half of 2007 (pre credit crunch). However, as an indication going forward, the post Northern Rock trend (down, down, down) is far more telling

Roger Merrill, Richmond,

HIP's perhaps ?

Josh Martin, Oxford, Gt.Britain

"house prices have fallen for four months in a row"

Surely this should read house price inflation has fallen for four months in a row? If house price inflation is 2.7% surely that's still a growth? (Maybe not in real terms, but in nominal terms it's a growth nonetheless)

Hassan Azam, Banbury , Oxfordshire, England

As Paul rightly says house prices are starting 'their journey back to sensible levels'. The figures bear this out with the affordability ratio having hit 9-1, which is double the historical average for the last seventy five years being reason number one. UK personal debt currently stands at 101% of GDP which is reason number two and number three is that house prices only ever travel in one of two directions - up or down.

figurewizard, Hampshire, UK

I think the 150,000 odd homes we need to build every year should be ahead of that.

Economics 101 - supply and demand. As long as there are more buyers than sellers the price of the product will rise.

Joe, London,

I don't know why this has come as such a surprise. Surely, people had more commone sense than to think they could go on living in 'never never land' forever? After such a huge increase in house prices over recent years, of course there has to be a time of stabilisation or even decline.

Remember the late 80's which left some house owners with up to 40% negative equity! So what's all the fuss about because of a fall of a very small percentage, and having to save ( this seems to have become a dirty word these days), to get a house deposit together?

Marita, Mulhouse, France

So the long overdue correction at last begins and house prices will start their journey back to sensible levels. Good news in the long run.

Paul, Coventry,

Excellent news!

Now to sort out the 1.4 + trillion pounds of consumer debt that is supported by them....

Austin Tassletine, South West, UK