So, MJW, can house prices rise faster than incomes indefinitely? I would respectfully suggest that there are just as many sub-prime mortgages in the UK as in the US, by the way, they simply haven't been securitized into the hands of specialists and so may escape scrutiny a little longer. If you were restricted to Sky News as I am in Russia, you would have noticed that Carol Vorderman and cohorts have been urging people who should probably be renting to refinance their homes to the hilt for some years.

I am no economic theorist either. I accept that if the housing market were restricted by planning controls to -say- one house, it would command a pretty dramatic price. However at some point, voters will expect the Government to act on the supply constraint issue so that their children are not homeless (or living with Mum and Dad indefinitely). If Brown increases supply as promised and if interest rates rise to constrain demand, does one have to be "an economic theorist of any note" to expect a price adjustment?