Are the current problems in the housing market exacerbated by underlying faults within the economy? Or is it just that the media is telling us that there is a potential crash which is provoking panic from homeowners? I am of the opinion that the latter is the most prevalent issue.

Obviously the housing market - and general state of the economy - is newsworthy stuff, but the extent to which it is reported is surely sending speculation out of control. According to the Times today, mortgage approvals are down 56% from May last year. While this is an issue worth noting, it is not reason to go into blind panic. The mortgage market needs to go through a phase of correction to rectify the banks' errors with irresponsible lending. The way for them to do this is to stop giving out mortgages to anyone who asks for one, and start to bring their debt levels back to an equilibrium. This may lead to a short period of time where selling, buying, re-financing and borrowing will be a little more tricky, but it won't last long if people are willing to ride the wave and be patient.

The state of the economy as a whole is about as good as anyone could wish for and as such the correction of errors within it should not take long if there isn't an abundance of scare-mongering from the media. Once the banks have evaluated their issues and figured out a solution they will then be happy to lend again; though maybe in a slightly less reckless manner. And when this is the case the housing market will in-turn correct itself and cries of 'negative equity' and a 'robbing government' will cease. There will probably be a new group of property millionaires as well, who we can start complaining about the next time there is there is a little blip in our (think-ourselves-lucky-it's-not-Zimbabwe) economy.