Thanks to Simon McLean and JP Morgan for this excellent bit of work.

I am not an economist or an estate agent. I take what economists say about the housing market seriously. I do not regard estate agents as economists and regard their comments on markets with suspicion.

The comments on this slide are intuitively right. We can only just afford our mortgages with interest rates depressed. Valuations are being kept high by subdued demand, caused by little credit and little confidence.

If mortgage rates rise but are no easier to get then we’ll see more defaults driving prices down and less purchases driving prices up.

As JP Morgan has it, best case of a 10% falling housing prices is hope for on the basis that the impact of inevitable rate rises (driven by inflation) will be slow to arrive. This just tells me that the depression in house prices will be longer.

The message is that the days of easy money in property speculation are and will remain a distant memory. Time to start saving for your future lads  – you can’t buy a sausage with a brick – never could. You certainly can’t fund your retirement from negative equity.

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