never trust the opinion of someone who's future depends on it.

gary French, Dallas, Texas US

Francis Henderson, Arundel. You live down the road from me, I'd love to know where you buy your rose tinted specs! The market around here is next to dead. In the last property crash, the SE fell most of all. Here are a few figures to challenge your assertions. In 1988, at the height of the last boom, the house I own sold for 150k. I bought it at the bottom of the market in the mid-90s for 80k and it's now worth about 250k. Had the buyer in 1988 hung onto it for 20 years, he'd have paid almost 200k in mortgage interest. That's 350k for a 250k property bought and sold at the top of two consecutive booms, ie a 100k loss. If he had hung onto it for 25 years and sold at the bottom of the impending crash, I fully expect that his LOSS would have been at least 200k. Money can be made from property if you buy low and sell high, but you have to factor in interest paid, tax if BTL, inflation etc. Simply looking at past and current prices reflects the economic ignorance prevelant in th UK.

Clive, Chichester, UK

They will rise again but not until we are well into the next decade.Day follows night,but we are only in the early evening.The Halifax hasn't got a clue regarding the future of UK house prices.They're living in Dreamland if they think the UK can avoid a big crash.

stephen hulton, eure, france

Quote from the film Aliens, “Elevator to hell, going down”!

andand@kent, T/Wells,

The property market will perform above most other investments, when a view is taken in the longer term. Make no bones about it, as sure as night follows day, the market will strengthen, and prices will rise again.

Sure, over the next two years the market will harden and property in undesirable locations will lose ground, but soon as petrol, food, & wages rise & inflation gets into the system, the next property boom will be around the corner.

The doom and gloom merchants who have sold and moved into rented accommodation will rue the day, when they are unable to get back onto the property ladder and face ever increasing rents.

To the members of the flat earth society, take a look at history over the last 100 years, unfortunately your stuborness will let you agree!!!!

Francis Henderson, Arundel, West Sussex

Seasonally adjusted - very funny

This is the biggest Dec-Jan drop ever . They should open a massage parlour in every branch.

Period Index %Change £Value £Dec-Jan
Jan 2008 619.1 3.9 191,275 -4,058
Jan 2006 539.7 4.2 166,744 -2,694
Jan 1997 210.1 7.1 64,918 -1,099
Jan 1992 212.1 -3.6 65,520 -810
Jan 1994 197.9 1.1 61,133 -795
Jan 1991 220.0 0.1 67,966 -742
Jan 1993 195.7 -7.7 60,471 -698
Jan 2005 517.7 12.6 159,956 -607
Jan 1989 213.4 33.6 65,941 -522
Jan 1990 219.8 3.0 67,913 -437
....
Jan 1987 137.4 13.6 42,462 -254
Jan 1998 222.2 5.8 68,659 -207
Jan 1984 101.7 7.3 31,433 -131
Jan 1988 159.8 16.3 49,368 -106
Jan 1985 111.3 9.4 34,391 -31
Jan 2003 388.8 22.5 120,137 194
Jan 2007 595.7 10.4 184,067 422
Jan 2002 317.5 16.8 98,088 676
Jan 2000 269.2 16.0 83,175 1,356
Jan 2004 459.9 18.3 142,105 1,447

non-adj, Dec-Jan differences

john, Reigate, Surrey

It is revealing to examine the underlying Halifax data before their (mis)application of the X12 seasonal adjustment programme (a system that provides for a cornucopia of fudge factors). This shows that prices peaked in August at £201,081, and have already fallen 4.9% to £191,275. The drop from December is 2.1%, or £4,058.

Halifix's (sic) seasonal adjustment boost is 3.1% - a record and comfortably above the 2.1% average over the past 25 years.

Mark, Woking,

Supply and demand on our small, dirty overcrowded island will prop up prices?

Tell that to the Japanees. Interest rates between 0 -and 1% for years and property prices dropping 75%.

What makes you think it couldn't happen here?

Gareth Jones, Dusseldorf, Germany

Oh dear, Mr Ellis is obviously sweating around the collar a bit to come out with such nonsense in the hope someone will believe everything is honky-dori on the home front. The only economics that we have seen since New Labour came to power is the economics of greed. If that's sound economics I'll eat my hat. What the last ten years has shown people is that there is no such thing as a free lunch and now the debt has to be paid back. Property is going down, and it is going down big time. People are talking recession. I think depression is a better word. History always repeats itself when Governments are run by fools.

KeithT, Newport, Isle of Wight

Michael from London. If house prices are fundamentally about supply and demand, it would not explain the spectacular inflation that has taken place over the last 10 years - there are empty houses in the UK, rents have been subdued and there are few people living in shanty towns in Hyde Park.

Housing booms are not about economics, nor are busts. It all boils down to a person, influenced by the need for shelter, fear, greed, love, the media, his bank, his/her mates, surveys, the Halifax, Rosie Millard.... He or she views your house and makes a decision about the price.

Comments like yours are remarkably similar to those made before the last bust in housing in the UK, before the current difficulty in the USA, before the collapse in Japan 1990 to present, before the crash in Finland in 1989...

Trevor, Limerick,

everything is fantastic and the market will continue to rise and rise and rise forever above the rate of inflation and everyone with property will be richer than their wildest dreams.

Hugh, London,

Rob believes the BBC. How touching.

Skeater, Basingstoke,

House prices at a price to earnings ratio of 8.5 and higher in some places, when the historical average is 4.5, makes a mockery of this statement. Factor in rising inflation and a wholesale credit crunch following eye-watering losses by the banks and it gets worse. Next time the Halifax or anyone like them is quoted it might be better if it comes from someone other than the sales director.

figurewizard, Hampshire, UK

It beggars belief that Martin Ellis can talk about "sound economic fundamentals" and "lower interest rates"in the same breath.Carry on lowering interest rates and you will devalue the currency so oil and other import prices will go up as in the 70's.
Neither is it sound to keep house prices up by artificially restricting supply,particularly of building land .It is a grotesque rigging of the market and when constraints on supply are loosened as with commercial property where the liberty to keep buildings off the market cost free is set to be removed by the tightening of empty property relief on business rates, prices collapse to their use level.In the US where there is more cheap land ,not only do you have no artificial housing shortage, you have a housing over-supply or "overhang".
You can avoid an American house price slump but if the measures taken comprise depriving the young of somewhere to live / crippling first-time buyers with mortgage debt this is nothing to boast about

DBC Reed, Northampton, UK

These figures reflect sales agreed in October-November before the bursting of the housing bubble became fully apparent. Unfortunately the 'greater fool' theory of bubble economics still holds and those who have just completed will be pretty unhappy when the trend becomes a ski-slope by early summer.

Remember that last time prices collapsed, after the 1989 bubble, they kept on falling for five years, a 35% fall in real terms (headline prices fell less but their absolute value was eaten away by inflation of >10% per anum). With lower inflation this time, expect house prices to fall further than last time.

The BBC Panorama programme last night about sharp practices in the new-build industry leading to recorded (and indexed!) purchase prices 30% higher than those really paid was an eye opener. Take that 30% underpinning the market away and what have you got?

Denial is an very human method of dealing with an unpleasant situation but not, in this case, very helpful or productive.

Tom, Bristol, Somerset

Having read the Halifax report I note with concern that house price inflation although moderating is still roaring ahead at over twice the official cpi rate of inflation.
This begs the question if the Bank of England reduce interest rates this month whether it will be seen in retrospect as a mistake (like the previous premature reduction in August 2005).
Only this time we will not only have resurgent house price inflation but also more general inflation.

James, NI, UK

Where I am in London, asking prices have risen from last year and properties are shifting in 4 weeks, with no shortage of viewings and buyers. I hear its different in other parts of London and the UK but fundementally prices are about supply and demand. And for prices to fall you need desperate sellers, which I don't see at the moment. Maybe if the unemployment level rises rapdily things will change as people become forced to sell. And even then the distressed properties are likely to go to developers for renovation and subsequent resale or let.

Michael, London,

Martin Ellis would dismiss wholesale price falls. What the hell would you expect him to say ? Armageddon's round the corner??

However, Nationwide and Halifax will do thier utmost to fiddle the figures to ensure that everything looks relatively rosey. Meanwhile, in the real world houses/flats purchased for £200k to £300k only a couple of years ago are now re-selling at half those prices and less - see Panorama, BBC, 04/02/08.

Nationwide this week - nominal fall 0.6% on the month but 'seasonally adjusted' figures make it 0.1%. Well isn't that neat - what are they selling, brussel sprouts?

Trouble with crashes is you don't know you're in one until it's half way through. This time will be no exception.

Rob, Isle of Wight,

p.s. during the last crash it was not as if prices fell continuously. There were months of rises and falls for the first couple of years. It will be no different this time.

Raj, London,

The housing market is a bubble and the economic fundamentals are unsound in the UK, Europe and America.

Of course prices may not have peaked, but all markets are cyclic and the longer a trend continues the bigger the retracement; at some point house prices will revert to and probably go below the long term average.

In Japan prices peaked in 1990, after similar cheap money and lax lending standards that have fueled the UK market. Prices intially fell by 5% in the first year, then 14%, and they kept on falling; after 16 years they had dropped by 70%! Of course, this time it's different.......

Tony, London,

If the Halifax is correct about prices remaining flat, then there is no need for any interest rate cuts. After years of house price rises in excess of the rate of inflation, a period of price stagnation for several years should allow a correction of the bubble.

david webb, bournemouth, uk

Strange that the Halifax would make such a prediction, it's almost as if they have some kind of interest in the housing market...

John, Belfast,

Of course Halifax would say this. They want rate cuts and will do what tehy can to inspire confidence. Anything to encourage more buyers, more mortgages, more fees.

Jimbo Jones, Liverpool,

The housing market is extremely vulnerable and overvalued. There is no doubt that prices will continue to fall over the next couple of years. Common sense states homes going up from 3 x average salary to 9 in a few years is unsustainable.

Panorama last night showed how Land Registry figures were over inflated by builders and other companies. Fraud and loose lending are the reasons for the high prices. However the ongoing credit crunch will prevent this lending continuing for obviously overvalued properties. Already many lenders have stopped providing mortgages for new builds.

The highlighting of the British sub prime / self cert. mortgages is just about to begin. Already certain lenders have run out of money for mortgages with others likely to run out this year.

Prices can only go down at this stage.

Gavin, london,

The fact that house prices have risen by 182 per cent over the past 10 years makes me wonder why its so important for the treasury to lower interest rates to suport the housing market. Its plain to see that the fact that the house prices have risen at such a huge amount above the inflation rate that its the main reason the housing market is struggling now.

Lets get the housing market back where it belongs which is for providing a roof over peoples heads and not trying to consume people with thinking they are rich because the house value is going up.

Mick , Gold Coast, Australia

The housing market is starting to prove resilient.

Sound economic fundamentals will underpin the market this year, preventing any major decline in prices.

Where have all the doom merchants gone???!!! Back in their hole I guess, back where they belong!

Safe as houses!

Leigh Gainsley, London, UK