Gerry Lynch:
You're right about the Halifax stats not being based on actual sales. Interestingly, Land Registry data (actual sales prices) give an even less pessimistic (and because it's fact, realistic!) view of what's going on - although their volume data unfortunately is only reported 2 months in arrear. Strange as it may be, the only actual "price drops" seem to be of unrealistic asking prices. I personally think this is a good thing - but it's a very very different issue from falling actual house prices.

Ann, Sydney, Australia

WHY OH WHY do the media continue to try an whip up a storm that does not need to happen. The more they go on about problems, the more people believe it. HOUSE PRICE data says prices rose last month but that gets reported as "House price inflation drops" - Houses price falls get reported as "house price crash" -
Unless we start to get mass unemployment we will remain stable with the decision to move a choice not a necessity. The buy to let landlords have begun to make better returns as rents are creeping up and supply is dwindling. Yes i accept some prices ( which were over inflated in the first place) will come back slightly, however that is very different from the doom that is being spread by the media. The government say we need millions of new homes to keep up with demand but they are not being built. Basic economics Low supply means high demand ( despite the 5 rules listed by AA kirkwall)

Chris Beckett, Plymouth,

The upcoming recession together with the credit crunch will push the price of houses further downward. Are falling prices such a bad thing? For 10 years the economy has been dependant on house price inflation. We need to rebuild to take this dependancy away.

david barker, chelmsford,

A refreshing, but overly-optimistic article.
My view is at least 10% falls in 2008 and at best a stagnant market through 2009 and into 2010.
Reasons? - wages have to be allowed to catch up and recover some affordability, buy to let amateurs time to sell and invest in something more stable, immigrants to move back home or to more bouyant areas of europe as borders open to them, and the full effects of the global financial crisis have worked their way through the system.
As someone once said, 'you can't buck the market.'

george, aylesbury,

The Halifax statistics refer to mortgage approvals, not actual sales. In that case there are three additional factors that may be relevant:

1. In the present market between mortgage approval and final sale, purchasers will have greater leverage to negotiate a reduced offer.

2. First time buyers and buy-to-let purchases have collapsed since the summer. This means the mix of house sales has changed to more expensive properties.

3. In a similar vein in a falling market purchases tend to be more driven by need (new job etc) again these are more likely to be between existing house owners.

I know the Halifax statisticians try to do their best to correct for such factors but they inevitably use standard models which cannot perfectly reflect changing market conditions.

Gerry Lynch, Chichester, UK

The Boom/Bust Cycle contains 5 stages.

1. Relatively Stable price as currently no speculation.
2. Parabolic rise in the price, primarily driven by greed.
3. Temporary state of equilibrium and a pause in price movment.
4. Fear becomes Panic as people become desperate to sell.
5. Prices become stable again and a new equliibrium occurs between buyers and sellers.

(although there are variations in price and time scales, this is pretty constant in all boom/bust cycles).

We have passed the second stage where everyone says 'but it is different this time' and have entered stage 3. We will soon be entering stage 4.

Good luck, its a long way down from the top.

Adrian Allen, Kirkwall, UK