The UK property market is now unequivocally heading down. Statistics on house prices, understandably mixed as the cycle turned, have aligned to show falling values for four months. Forward looking surveys, such as Thursday’s report from the Royal Institution of Chartered Surveyors, also paint a gloomy picture. New buyer inquiries are falling and unsold properties are rising at a double-digit rate. Even the most bullish predictions for next year have prices remaining flat. That ignores the history of asset bubbles – prices do not level out, they fall.

Optimists are quick to point out that traditional signs of stress have not materialised. Repossessions may have nudged up from low levels but in general this is true. In a pre-close trading statement on Thursday, HBOS, the country’s largest mortgage lender, said that indicators such as the number of mortgages in arrears had barely risen. Not only that, customers seem to be prudently adjusting their habits – impairments in HBOS’s unsecured loan book are falling because people are reining in their borrowing.