Hmmmm
I disagree.

Why?

Well the net result of eleven years of financial deregulation and credit craziness has resulted in a 350-400% increase in property prices, yet only a 50% increase in average salaries.

The net result is as obvious as the credit fuelled boom of the twenties - as soon as credit dries up the whole market readjusts.

A lot of people have taken home loans they cannot hope to repay in adverse economic conditions, banks have been hugely irresponsible and governments have actively abetted the situation - yes Gordon Brown's economic stewardship is partly to blame too. He's "adjusted" inflation to fit the targets by manipulation of the official statistics which are used to record the baseline inflation figure - namely he's excluded the goods and services he didn't like the look of from the official inflation rate.

Back to those banks. They've been buying and selling credit and loans left right and centre. Bad debts have simply been "sold" to someone else to pick up the tab.

Right now the housing market is flat because the banks have run out of money to loan and homebuyers - including me - are being forced to save longer to pay for a deposit. Meanwhile, inflation and the cost of living has been hiked thanks to a somewhat clandestine devaluation of the pound about eighteen months ago - Thank you Gordon - and of course taxes will be hiked through the roof in the next couple of years to bail a profligate government out of trouble. Don't forget that governments are also borrowed up to the hilt.

The housing marketplace is simply readjusting itself due to supply and demand. Less money in the system equals less demand for homes, which brings down the asking price.

Otherwise, the UK is in for a rough ride. High taxes for the next three years will lengthen any recession and will stifle early signs of growth. More money going to the government means less money in people's pockets which would otherwise be put into the economy.

The right spending policy will make some swingeing cuts in public spending. Before anyone asks me about "schools and hospitals" it's well worth remembering that public spending is at record levels in the UK. Do we need ID cards? Do we need the 2012 Olympics? Do we need more nuclear submarines? Do we need to spend billions on Road Pricing, self imposed energy targets and some reckless public spending policies. I've just saved thirty five billion pounds in one paragraph, no doubt the 64 billion pound QUANGO economy (doubled since 1999) is ripe for axing, for example what is the point of the the British Potato Council and their generous public grant?

Reduced spending means less taxes and more money in consumers pockets.
(Bicycle Repairman "you're also a bit of a wanker", Mon 15 Sep 2008, 22:31, Reply)