So on the one hand you say we need to stop seeing houses as an investment (which I agree with BTW), yet on the other hand you say investments can go down as well as up? A tad contradictory?

In any event it's not about investment. If you've bought a house you need to sell it for at least the value of the outstanding mortgage - break even if you will - unless you have sufficient funds to pay the difference. So in practice you're looking at people who have paid off all or the majority of their mortgage being the only folk who can afford to sell at the 'correct' price.

Not at all. What I was saying was that if you've bought something as an investment you should not reasonably expect the whole system to be rigged in order to preserve it's value.

The systems I was developing were in order that someone on the phone to someone applying for a mortgage could click a few buttons and get an automatic decision, thus taking the decision away from someone with experience of what was reasonable to an unblinking box stuffed full with rules the institution specified.

At least now I'm doing something socially responsi..... Oh.

Again, looking toward our continental neighbours, it is not uncommon to find 50 or even 75 year mortgages. Quite often the children of deceased parents inherit a partially-mortgaged liability, instead of a freehold asset.

When my mother died, I persuaded my old man to switch to an interest-only mortgage, to save himself a few bob each month

Nationwide will accept a mortgage agreement up to the principal borrowers 70th birthday, which is what I did to drop the repayments when our household income went into freefall about four years ago - lost 60% of income overnight - I've left it at that because the master plan is that I won't still be paying the mortgage at that age - assuming that I retire at the "normal" age then thats when this house will be sold with only a small amount left owing on it and a smaller retirement hole in the ground purchased with our own equity.

I couldn't give a damn what the house is worth, the next one just has to cost whatever equity I have in this one when I want to retire.

Its a plan.

And what if you haven't bought it as an investment? Is it just 'tough luck' for you as well?

If you have not bought it as an investment then you won't be expecting to make any money out of it.
Conversely, if you are looking to make money out of it, then it IS an investment.
If the overall market prices go down, so will the price of the next house you want to buy.

As I pointed out earlier, this only works if you've paid down your mortgage enough to be able to afford the sales price shortfall.

Good point and allows me to mention that even if you don't intend it, owning a house becomes an investment anyway.

The few? I think a housing price crash would bring pain for more than a few which is part of the problem.

I think people have forgotten what happened when prices crashed in the 90's. I bought my first house - a one bed 'starter home' - just before the market imploded. I sold it 4 years later for roughly half what I paid for it. As I'd taken an endowment mortgage (they were all the rage back then) I had to pay the full difference between purchase and sale price myself. Luckily both my wife and myself had good jobs and no kids so we'd been able to save enough to do this. Wiped out our entire life's savings though, and we've been recovering from that blow ever since.

Many others will not be in the position to do what we did and will be unable to sell unless they can make at least the outstanding balance on their mortgage. And since there were so many high LTV mortgages sold this will be close to their original purchase price.

Just one more reason why the housing market is so slow. Too many people who simply can't afford to sell for what new buyers can afford to pay. It's a mess.

I worry for young people today that are still obsessed about getting on the property ladder asap "as an investment".

Sure if you want somewhere to live, have a family etc, buying a house is fair enough but for young people early in their career the sacrifice of mobility is often a bad financial decision. House prices are not going to rise like they did between the mid 1990s and late 2000s any time soon, because the two things that drive house prices up - rising wages and rising loan to income ratios, are not going to happen this decade at least.

Also a lot say they want to buy because they want to avoid "dead money" by renting but they then underestimate how much their landlord pays for the upkeep and maintenance of their property, which when they buy a house themselves, they will start being liable for.

If someone wants a place to live, especially for a family, and can get a mortgage then go for it but I think when you get people rushing to get a house early in their 20s because they are chasing the prospect of a capital investment that will give them large gains over the years I think a lot are going to be disappointed.

Isn't that a key part of the problem, though: that we're worried about 'the market' and not whether people have somewhere decent home and affordable live?

Unless you're suggesting that we build enough council housing to supply everyone who needs accommodation then the housing market - in the sense of the sale and purchase of houses - is always going to be important. The issue is not with having a housing market, it's with the way that market operates.

Well, I certainly think what Labour has mooted this week is a nonsense.

I think that we need rent regulation – and a massive social housing building programme.

Even if the market improves quickly, it still doesn't deal with the fact that we have a shortage of housing.

My suggestion of peppercorn leasing of land and rents that reflect the build cost only - even at 50% of "market" rate, they'd still be an attractive investment and would lead to a readjustment of the rental market. Potential losers would obviously be those who rushed into Buy to let but hey, investments can go down as well as up eh?

[url=http://www.bbc.co.uk/news/uk-england-london-19793965This certainly won't help matters[/url