Property-obsessed British homeowners can take the despair; it’s the hope they can’t stand. Contradictory signals from two closely watched house price indices raised cruelly then dashed hopes of a turnround. Friday’s 1.9 per cent month-on-month fall in the Halifax’s March index contrasted with a 0.9 per cent rise reported by the Nationwide only the day before. There is little doubt as to which one best reflects the underlying reality. The downward trend will continue, possibly for some years to come.

To judge by the US, where prices started falling more than a year earlier than in the UK, there is still a good way to go. From its peak in the second quarter of 2006, the S&P/Case-Shiller’s 10-City Composite is down 30.2 per cent. Measured by the Halifax index, homes in the UK now cost 21 per cent less than at their top in August 2007. Property derivatives markets may be imperfect and dominated by those seeking to hedge their exposure, but they still provide the best guide to the smart money and that is resolutely short. Two-year residential futures are pricing in further declines in the Halifax index of 26 per cent.