The UK is rapidly becoming the sick man of Europe again. Wow, in 2 yrs time we will have Sterling at parity with the Euro, the IMF in, massive trade imbalance, house prices 40% less, high inflation, high unemployment and frequent strikes. I might buy a house again then!

Maritn Grelton, London, UK

When the economy has been grown by credit and the supply of credit dries up,isn't a recession inevitable?Those 2 year fixed rate deals,in effect,allowed people to borrow more than they could afford and allowed house price inflation to get out of control.

stephen hulton, eure, france

I don't think the UK will be the only country to suffer, but I think that the suffering could be great given that Tony Blair gave us an economy built on sand. Long ago they could have taken measures to prevent this but didn't.

duncan, Wokingham,

Until the B of E sets interest rates that relate to the real inflation experienced by families and pensioners, and not the doctored "official rate", then inflation will never be properly tackled. It is obvious,isn't it??

nic, paphos, cyprus

Royal Bank Of Scotland didn't pass on the last interest rate cut and have just informed me that they are raising the rate on my offset mortgage by 0.25%. Inflation is everywhere apart from in my pay packet !

Dave, Reading, UK

Can someone remind me why the government leant the banks so much money? Does anyone really expect the tax payer to see the money returned? I suspect the loan will all be forgotten about in a years time.

Patrick Bateman, London,

With 1.5 million houseowners coming off 2 yr deals this year there is clearly a whole lot more misery to come. Many will not be able to cope with higher repayments which can only mean repossession.
A new culture of couples living with parents could well evolve

V Cooper, Yeovil, UK

Housing starts may be down but we are building more prisions.
Look on the bright side :O)

Alex, Nottingham, Nottingham

Douglas from Northwood you say "along with political leaders who have proven foresight and vision".

Where and who are these people??

All I see is NuLab!

Who said "no more boom and bust" who take a higher % of my earnings than any Government before them, with NEGLIGIBLE RESULTS!

Tim, Birmingham, UK

This is a trend. When journalists get fed up with this they will create a new trend.. & start reporting that of rising house prices. To turn the current situation around we need rallying & optimistic spokespeople from Banks & Newspapers. Propaganda will kindle the flame.

Maurice, Chelmsford, UK

Job losses in construction will accelerate the return of Polish migrants to their homeland and may even lead to some British workers following them to the continent; all of which will reduce the demand for housing, accelerating the price falls brought about by the credit tab drying up.

Paul, Coventry,

Douglas, Are you living in China, Russia or Brazil. I assume it is not the UK as our political leaders, if you can call them that have crushed this once great country. We have spent all the money on non workers and bombs, thats foresight? It will take many years to remedy these cowboys blunders

john, bath,

Why are you all worrying: we have a strong Prime Minister who is taking the correct long-term decisions for the country. He assured us there would be no more boom and bust and the UK is well-placed to weather the storm.
He is also the ex-Chancellor and now PM who's policies got us into the mess.

Donna Walker, Effingham, England

I agree with Douglas, The UK under New Labour is a mighty and resilent economic machine that dispenses jobs and social justice for all, including worthy migrants and asylum seekers from abroad. Enough of this gloomy defeatism and lets accentuate the positive and get back to "Cool Britannia"

Roberta, London, UK

what did we expect? It's market reset. people on a combined wage with their partners of £45k cant afford 150k houses. Dont be silly. did you think it would keep going? "here have a 40 year mortgage!! to pay off your 2 bedroom apartment until your 2 years into your retirement!!" it cant be afforded

samarius, Leeds,

As the banks and building societies cannot borrow enough on the market to finance their loans, they have realised that they must replenish their coffers by offering more attractive savings rates (eg Halifax at 10%), so double-digit mortgage rates are around the corner.

Paul, Coventry,

If only interest rates were neutral since 9/11, we would almost certainly not be in this very precarious situation today. Artificially low rates may have done wonders in the short term but an absolute disaster for the longer term. Lessons to be learnt? No, it's failure to learn from history

cww, suffolk,

"A spokesman for the Department for Communities and Local Government said that building companies needed to ignore the market conditions..." Brilliant ! With such a firm grasp of economic reality we have nothing to fear under a NuLabour govt!

Robin, Hassocks,

I assume that's sarcasm Douglas? heh, good one!

Sebastian, Manchester, England

Whinge, whinge. A period of belt-tightening in these times of instant gratification is good for everyone and if you can't ride out the bad times then you spent too much during the good times. Tough luck chums.

Olly, London (Central),

everyone should stop worrying. the labour government influx of highly skilled hardworking immigrants will save us.

bob townsend, wirral,

I think stop with the panic mongering already. Most people aren't actually noticing much of a difference in expenses so far and if people have to stay put in the same house for a bit longer instead of constantly moving up the propety ladder - so what ! Owning a house isn't the be all and end all

susan, glasgow,

'This wretched government' will prove its worth by not attempting any 'quick fix'. The 'house price boom' has existed only because we have all managed to cheat each other,bidding up illusory 'values'. Now the scam must be left to die.House prices must end where they end, with no interference.

eric campbell, harrogate, uk

Douglas, political leaders with foresight? Vision maybe, because words cost nothing. Foresight means having a
plan to pay for and deliver a "pledge" (the free bit) e.g. to increase the number of houses being built.

Jon Cavendish, London, UK

Douglas - oh the sarcasm! Well done. Yup - and guess what these political leaders with vision will do next - raise interests rates!!! That's bound to help things! The true powerless and spineless nature of political and economic "leadership" for the UK has never been so visible!

James, Salisbury, UK

Economic fundamentals are good.......

Chris, Bedford,

Time to go back to building rows of terraced town houses like in northern mill towns with a small front yard big enough to park 1 car on also a rear yard large enough for a shed and a clothes line.
This should be cheaper than £200M on renovating 1500. Time to buy what you can afford not a dream.

Contax, Brigg, N.Lincs.

As Chris Coles mentions Robert Beckman's book 'the downwave' predicted this in the eighties. He was a very successful investor and economist, proving it is possible to make a profit without great risks. Houses in USA are now a fraction of prices here and still going down. Three bed detached £57K !

David Nommaory, Liverpool,

The Oil price surge is caused by 'face to face' unregulated trading by..THE BANKS. This is the next CRUNCH when prices plummet. Make these trades internationaly a not enforceable debt and it will stop.
Don't buy a house until interest prices reach the same level as rental and you should be OK!!!!

David Nammory, Liverpool,

Ladies and gentlemen, I think Douglas in Northwood may have been using Irony.

Government inflation figures are useless because they measure nothing in particular and have been fudged to all hell.

Frank Upton, Solihull,

Some decades ago Robert Beckman wrote The Down Wave which predicted this was all going to happen during the 1980's. If he is correct then house prices are now about to fall to pre-1939 levels. In that case there is a long way to go before we see the bottom. Cash is King and a house becomes worthless

Chris Coles, Medstead, Alton, United Kingdom

'Families' this and 'families' that...this affects everyone. Those struggling alone could well have more difficulties than those in larger groups, not to mention less assistance if the you-know-what hits the fan, so what's with the families obsession? Do others not matter?

Jonathan, York, England

Banks ask shareholders for extra cash to cover bad investment losses & set their own inter-bank rates. Oil companies struggle through carteling oil & causing labour problems.

Why are both these type of commercial enterprises still publishing record profits? This is causing the UK high inflation

Conrad, Newcastle upon Tyne, United Kingdom

To Ian Tinn: many friends of mine who have moved rental properties this year have been able to look round several and nearly named their price to the landlord, rather than having to suffer whatever over-inflated 'market level' the greedy letting agent has suggested.

James, Bristol,

200 million to renovate 2000 houses but Noble Frances, of the Construction Products Association, says it is not enough..that's 100,000 per house!!!!

Paul, Blackpool,

The UK can export hugely to India, as its economy continues to grow at 9 per cent p.a., India depends less on exports for its GDP growth than other significant countries and its Banks have virtually no exposure to the US subprime credit problems.

Indo-UK relations can deliver mutual benefits.

Mr Vipul Thakore, London, UK

People who rent often feel safe, but they are not.

If people cannot buy, they must rent. Increased rental demand, with no fewer rental properties available, will increase rental fees.

Maybe renters should fix their payments while there is time.

Ian Tinn, Slough, England

Inflation is a terrible tax on savers. Negative interest rates are an incentive to seek the safe haven of gold.

Don't wait to buy - buy and wait

Galloping Inflation, Southampton, UK

With our educated masses and a steady hand we will reap our due rewards.

douglas, Northwood,

It is more like punishment time..

Kara Swart, London, UK

Thank you to douglas, Northwood - first real laugh I've had in ages.

Jane, Bath, Avon

Two 0.5% Mortgage rate increases in two weeks, wow!!.
If some borrowers are now paying nearly 8%, how long before Mortgage rates are into DOUBLE figures.
Within six months??.
How many people can afford to pay a 10.5% mortgage every month?. or a 11.75% one!!.

David Diggins, Derby., England.

The house market while significant, is only a part of the ecconomy. Attempting to prop up over-priced houses is an impossible task, but trying (via low interset rates) just undermines Sterling and supercharges oil and food inflation.

Inflation is a real threat to all. Let the house market go.

Mike, Tauranga, New Zealand

Douglas of Northwood, you forgot the stiff upper lip.

Mike, Maidstone, UK

Banking stupidity, greed and the now necessary repairs is the root cause of the impending downward economic spiral in the UK.

D. G. Mitchell, Weinheim, Germany

Neither the official inflation rate nor the BoE interest rate have any connection with the real world at the moment. They have lost credibility and with it inflation expectations. Watch out!

R James, Clifton, uk

Douglas - Northwood - Are you actually living on planet earth or recently woken up from a pleasant dream ? Since when have any of the last two governments shown any kind of foresight and vision ? Name some examples, please !

Daniel, Margate, UK

"Gordon Brown described the trebling of world oil prices as “the most worrying situation in the world” at the moment"

So people losing their homes because they can't afford a mortgage any longer isn't the 'most worrying' situation? Gordon continues to put the British people in their place.

judy, Liverpool, England

Labour has that reverse Midas touch, gold is transmuted into the contents of that creek where you have lost your paddle!

Alan, Luton,

You are joking Douglas (I hope). "Foresight and Vision" ? These "leaders" have let a credit bubble get out of control and now it has stopped inflating the inevitable consequences arrive. Far better to build an economy on savings than debt. The former goes to production the latter speculation...

Steve Ballmer, Sydney, Australia

But, only a short time ago, Gordon Brown told us that UK was better placed than any economy to withstand a 'downturn'.
Strange, though, how he claimed responsibility for all the apperent good news of the previous 10 years and now none of this seems to be his fault!

Ian, Menorca, spain

Like the game of Monopoly, people at the Mayfair & Park Lane end of the board are largely unaffected. It's the ones nearer 'Old Kent Road' that are being hurt. The rest of us keep landing on the 'Water Works', 'Electric Light' or 'Pay Tax £200'. As for the train stations, their charges are hurting.

Steve Marchant, Broadhempston, UK

Cost of basic living (fuel, transport, mortgages, food etc) continues to rise, but wages are fixed (otherwise leads to inflation so everything goes up even more) so the high-standard of living we have taken for granted must come down.

In short, we will all feel the pain - start economising now !

Sam Redman, London, UK

These are the joy's of a credit fuelled boom.....

'Golden Browns' economic miricle was little more than a credit bubble - rack up house prices and get everyone to to borrow more money.

When the bubble ends it ends painfully. this is natural adjustment and must happen.

bob, scunthorp,

G.B. considers trippling of oil to be disasterous...........

but he was quite happy with a trippling of house prices.

This is the boom and bust he promised to avoid

dave, alderly edge,

if unemployment rises and there is a shortage of homes will this hopeless government realise that we need to reduce the number of people coming to the UK and perhaps send some home, or are we now also going to have to pay them unemployment benefits as well? Brown useless!

Richard de Gerber, Kingston upon Thames, UK

Large scale investors prepared to take over the construction companies more like; will mean the present equity shareholder will lose all.

The construction companies have supersized debt, negative equity with falling revenues.

Mortgage available = sales revenue; no spare cash and falling income

Goldfinger, Gloucester, UK

So what.
We have a diverse and vibrant population which is well placed to weather the storm, along with political leaders who have proven foresight and vision.
With our educated masses and a steady hand we will reap our due rewards.

douglas, Northwood,

Only a few months into this and the UK looks far worse than the US overall. Inevitable though as the UK was ONLY built on debt during the last New lab decade whereas the US will and has the ability to bounce back.

Paul, London, Canada

We are now in uncharted waters as far as the housing market is concerned. There will be no quick fixes from this wretched government. House prices may well follow in the wake of house builders share prices.

victor, London, United Kingdom

I have got a funny feeling that this isnt going to go away, when this all comes to a head, its going to be huge....

Sam Smith, Southport, UK