Another favourite stomping ground of gloom-and-doom merchants is the dear old UK housing market. Remember those forecast house price crashes of 2005, 2003, 2001 etc.? Don’t worry – this time’s for real. Just look at the fall in mortgage approvals – down by 20% in 10 months; and the latest RICS survey showed a net balance of 20% estate agents expecting prices to drop.

Trouble is, mortgage approvals plunged by 43% in 2004, while the RICS expected prices balance reached -29%, and still prices didn’t fall.

Brian Durrant of The Daily Reckoning keeps arguing that the housing market will be the victim rather than the assassin of the economy. In other words, prices are unlikely to fall unless economic growth slows sufficiently to put upward pressure on unemployment. Leading indicators have yet to signal significant economic weakness and labour market conditions are currently solid.

Add to that a continuing lack of supply. Another good indicator from the RICS survey is the ratio of the current sales pace to the stock of homes on the market. As the chart shows, the ratio remains far above the low reached in 2005 and at a level historically consistent with modest price inflation.

I am not optimistic about medium-term prospects for UK house prices but the bears are getting overexcited.