You can see the price rises during periods of credit expansion and declines during periods of contraction. Nothing Darling does can change the inevitability of further falls. He has two choices: to simply let prices fall to the point where houses have become affordable again; or, the option he appears to have taken, which is to devalue sterling, so the falls don’t seem so bad. But the net result – the real value of houses - will be the same.

 

http://www.propertyweek.com/Journals/Builder_Group/Property_Week/5_September_2008/attachments/HousePriceIndexAugust.pdf

House prices in August were 10.9% lower on an annual basis. The UK average price has returned to the level it was at in February 2006.

 

Joseph