HarryM - 1:04 pm on Dec 2, 2007 (gmt 0)

I don't believe these doom and gloom scenarios. The UK housing market will adjust to the general financial situation as it always has. There are always people who are hard hit when the market turns down (It's happened to me! Twice!).

The fact is there is a shortage of housing in the UK, and so when the general financial situation is buoyant, houses get overpriced. When the situation worsens, house prices fall to more realistic levels.

This has been exacerbated in recent years with people thinking they can make easy money out of buy-to-let, and also all the irresponsible TV programs about amateur property development. People make alterations and slap in new bathrooms and kitchens thinking they are going to increase the value of their property, which works OK with all the gullible buyers who are around in times of optimism, but the value sinks back to bricks-and-mortar reality when optimism fades. After all new kitchens and bathrooms quickly date and have to be done all over again at some time.

Personally I prefer the French method of pricing properties. The key points in a French house brochure are the area of the plot of land, the total area of the property, and the area of the living accomodation. Whereas in the UK people tend to purchase on impressions. Remove half the furniture, paint a room white, and everyone says "Isn't it spacious!" But the same room full of furniture with a dingy colour scheme is rejected as "Far too small!"