Run in fear.

Earthquake? Volcano? Alien invasion? Worse: an economist has made a prediction. Thing is, even The Telegraph, who have published said prediction, aren't entirely sure what it is.

Alan Greenspan warns of UK house prices drop

warns the headline, but the article itself says that

He warns of "difficulties" ahead for UK home owners, as rising interest rates bring house price growth to a shuddering halt.

Shuddering aside (and I'd love to see the graph of that), which is it? Are house prices going to go down or merely cease to go up? Since the journalist who writes the article very rarely gets to write the headline, it's a good rule of thumb to trust the article. So house prices are going to cease to rise. Since insanely rising house prices are one of the biggest economic problems facing Britons today, this is Good News. Even if they were to go down a bit — ten percent, say, or even twenty — most houses would still be realistically unaffordable to most Britons, and most of us would still have to get in debt up to our eyeballs for forty years in order to have a decent place to live.

Look at it this way. The value of my house has tripled in under three years. Yes, some of that is due to improvements we've made, but obviously not most of it: we haven't built an underground Olympic swimming pool or a heliport. Yet. And that's a fairly typical increase round our way. If house prices were to drop by a massive fifty percent UK-wide next week, that would still leave our house having gone up in price by fifty percent in three years, which is a massive increase by any reasonable standard.

It's good and right that the value of a house should go up when that house is improved. It's reasonable that the value of all houses should go up roughly in line with average pay increases. But neither of those things have been happening in the UK for many years now. House prices go up simply because houses are things whose prices go up. That certainly can't go on forever, and it will stop. And, when it does, the housing market can begin the long road back to something approaching sanity.