SUDDENLY, in the course of just a few days, the mood in the housing market has darkened under a slew of gloomy statistics and pronouncements.

These facts and figures should give homeowners pause for thought but, at the same time, it is important to maintain a sense of perspective. Every commentator who declares that the market is stalling, or worse, immediately qualifies those statements. All these pundits point to such positives for prices as the continuing strength of the economy, both national and global, and to the low level of unemployment in Britain.

But although sharp declines in values are still seen as unlikely to occur in most places, that outcome depends on all homebuyers taking a reality check now – as Mervyn King, the Governor of the Bank of England, spelt out this week. “Obvious though the point may be, it is unwise to borrow so much that the repayments are affordable only if interest rates remain at their initial level.”

Central bankers in other countries may speak in riddles to ensure that they can claim to have been right whatever happens, but our man is refreshingly direct – for which we should be grateful. We will like him even more if he takes account of the evidence that most homeowners have been cowed by the four rate increases to date and the threat of more to come.

But, although the Bank kept rates on hold at 5.5 per cent last week, Mr King is minded to raise them again, probably in August, and to consider yet another upward move later in the year if all mortgage borrowers do not exercise restraint. For, according to Dominic White, an economist at the ABN Amro bank, there is still a sizeable group of people who cling to the belief that the cost of borrowing will remain perpetually low.

Anyone seeking a cure for this deluded state should, as they say in America, just do the math. The monthly repayments on a £200,000 loan fixed at 4.50 per cent are £1,112, or £13,344 a year. The repayments on a 5.50 per cent deal (the best currently available) are £1,228, or £14,736 a year, an extra £1,392. But since mortgage repayments are made out of taxed income, the real cost of this higher bill is £2,320.

On page 4 we set out the consequences of the strain that this extra expense could mean for prices; this report is a continuation of the Bricks and Mortar debate on the housing market at the Grand Designs Live exhibition last Sunday.

Some experts predict that the impact will be most felt in “second choice” areas – the scruffier neighbourhoods close to prime locations – that are attractive to buyers of less easy means whose budgets were already stretched before rates began to climb. But the degentrification trend is not set to be universal: prices in the run-down postcodes around the Olympic zone still seem set to prosper from regeneration.

The effects of the slowdown are forecast to have the most muted effects on the pleasant inner and outer suburbs of London and other major cities, such as Bristol, Birmingham, Manchester, Nottingham and Manchester, and in spots such as Devon and Cornwall where urbanities like to take their repose or buy a second home. The slowdown may not provide the opportunity that many have been hoping for to snap up a bargain in a smart street.

THE HIP CASE LIMPS ON

The Government’s conviction that the implementation of home information packs will go smoothly would almost be touching if it were not so distanced from reality. This week the Department of Communities and Local Government confirmed that the scheme would start to be phased in on August 1.

Last month, in the latest of a series of embarrassing U-turns, the department was forced to restrict the scheme to four-bedroom homes, as there was a lack of inspectors qualified to complete the energy performance certificates (EPCs) that are the key element of a Hip. EPCs grade a property’s energy efficiency and are the only step that the Government has taken towards making homeowners more eco-responsible.

Now it seems that there are sufficient inspectors. Or so the department maintained, until it was forced to concede that just 70 individuals (two per borough) had been accredited in London. Such will be the demand for these inspectors’ services that they should be able to command a fee of £1,000 for each EPC, rather more than the Government’s estimate for the full cost of the Hip – from £300 to £600. There are now calls for the capital to be exempted from the scheme, which would mean that a private equity director selling a £10 million Notting Hill mansion would be spared the Hip bureaucracy, while the owner of a £200,000 house elsewhere would be forced to comply with the law.

Of course, this would be ridiculous, but with the Government seemingly determined to do anything to salvage its only reform to the house-buying process, probably not impossible.

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