This has been the year when the dinner-party property price chat got technical. Those with scant knowledge of sub-prime, Hips, raw space or Libor had little to say. As these seem also likely to be the conversational gambits of 2008, our review of the year should ensure that you are not socially excluded.

January: Most market forecasts for 2007 were cautious. But Halifax's average house price — which then stood at £188,826 — continued to rise until September. The successful bidder for a mansion in Phillimore Gardens, Kensington, paid £15 million — £3million above the asking price. One agent said: “It was in the category of house you would kill to live in.”

February: The average price edged up to £192,349, even as concerns emerged over the impact on the UK economy of the US sub-prime scandal, caused by the sale of “teaser” loans to indigent homeowners. CABE (Commission for Architecture and the Built Environment) deplored the spread of “built for nowhere, but found everywhere” Identikit homes. Prices for this type of development were already falling.

March: A lack of supply caused an upward move in the average price to £194,565, although the International Monetary Fund felt UK prices were overvalued. The shortage of family houses led to the usual margin between the wreck and the des-res to narrow. Ed Mead, of Douglas & Gordon, said: “This does not make sense, but this is not a market that makes sense.”

BACKGROUND

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BACKGROUND

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BACKGROUND

• Comment: The housing shortage

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• Comment: the property market slowdown

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BACKGROUND

• Average prices in the South are 1.59 times higher than the North

• The City’s ardour for status homes remains unabated

• The dawn of a more eco-conscious Britain may be delayed

• It's bonus time, let the stampede begin

• Prices and politics either side of the border

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BACKGROUND

• Mortgage competition makes millions immune to base-rate moves

• Hidden costs of a place in the sun

• Primark Principle revises gloomy views

• Going green is not cheap

April: And still the average price continued to rise to £196,387 — flattered by the growth of the London market, which masked the slowdown in the Midlands and North East. Property millionaires became almost commonplace with sales of £1 million-plus in one third of England and Wales's 685 postcodes.

May: Despite another base-rate rise to 5.5 per cent, the average price crept up again to £196,720. The Government had to delay the introduction of home information packs (Hips) until August. Critics argued that buyers — or rather their solicitors — would not trust the information in a Hip even when it did become obligatory. This turned out to be true.

June: Madonna, already owner of one Marylebone mansion, bought the one next door (for 30 times the average price of £197,450). The same lust for space led one Chelsea buyer to pay £2.5million (twice the asking price) for a neighbouring house to implement his growth strategy. But then neither he nor Madonna had worried about the Bank of England's warning that borrowers should not over-extend themselves.

July: A survey revealed that growth in the South was running at 11.7 per cent, twice the rate of the North, where prices were already stagnating. But the Bank raised the base rate again — which some called monetary overkill. The average price was £198,936.

August: Sub-prime became every UK homeowner's problem when the global financial market realised that $300 billion of sub-prime mortgages might not be repaid. Northern Rock, wont to raise funds in the money markets, could no longer do so. The run on this bank and its bail-out was not the end of this tale. Distrust between banks will make mortgages harder to obtain for a while. August's average price was £199,600.

September: Finally Halifax reported that the average price was down — albeit by just 0.6 per cent — to £198,305. Buyers' confidence had finally been dented by the realisation that repossessions in Cleveland, Ohio, the sub-prime capital, could affect prices in Cleethorpes and Cobham. Amid the US downturn, Manhattan remained buoyant, with much demand for basic, undecorated “raw space” apartments.

October: Halifax recorded another decline (0.7 per cent) in its average house price to £197,000. The impact of the smoking ban became clear; the value of a property next to a pub could be as much as £50,000 lower than the neighbourhood average because of the noise and litter caused by smokers driven outside.

November: The average price slipped again to £194,895, as the Royal Institution of Chartered Surveyors forecast that buy-to-let would become a rich man's game, with new landlords much less able to secure mortgages. The prospects look bleak for those over-indebted buy-to-let investors with city-centre flats who can now neither find tenants nor sell.

December: The base-rate cut brought some cheer, but most lenders set their variable mortgage rates by relation to Libor (London Interbank Offered Rate) — the rate at which banks lend to each other. As most banks hate each other's guts more than usual, Libor remains high. Some thawing in these relationships would give a fillip to the market in 2008, lifting the downbeat mood. But, despite fear and loathing in the banking sector, some property fans will remain, as always, enthused by the prospect of a makeover project, although few will equal the opportunity pictured below: the Brunello di Montalcino estate in Tuscany with four hectares of vineyards on sale through Cluttons for €12.5 million.

anne.ashworth@thetimes.co.uk

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