Housing formed the epicentre of the global financial crisis. It was a fall in residential prices that shook and cracked the banking system. News that housing markets are starting to level out is cheering. It would, however, be naive to assume that the housing market is now on firm and steady ground. There are perils ahead.

In the UK and the US, a range of data suggests that the housing market has stopped its precipitate decline. For example, in Britain, the FT house price index rose by 0.1 per cent in July – the third consecutive month of stable prices. In the US, the seasonally adjusted Case-Shiller composite index for May shows prices are levelling out.