BBC's Business Correspondent says house prices are unsustainable and predicts a surge in repossessions.

Yes, he is missing something blindingly obvious here. He keeps talking about averages. Both salaries and house prices have highly skewed distributions, so averages (if by average you mean 'arithmetic mean', which is what people usually do mean) are really not very helpful figures. Maybe an average house costs £200K, but if you're earning £25K then you're probably not going to be looking for an average house. You'd probably buy a flat for £100K instead.

As for the wider question of whether house prices are sustainable, I find that very difficult to call. 3 years ago I would have said that a crash was inevitable, as house prices have clearly risen way ahead of earnings, but given that people are still buying houses somehow, now I'm not so sure.

Dear Prudence, please say I'm wrong over house prices

By Jeff Randall (Filed: 22/02/2006)

Hmmmm RightMove - wouldn't be considering a float would they..?

"Crowley" wrote

OK, so some people have savings of Nil, some have savings of 10K, and others have savings of much more than 10K.

Those having just bought a house, ie having just paid out a deposit, will tend to have the *lower* amounts.

Those just about to buy a house, ie after saving-up for a while for a deposit, will tend to have the *higher* amounts (and after they buy the house will become people with the lower amounts!).

"Crowley" wrote

You forgot that the "average couple who is just about to buy a house", will have -- on average -- **more** than 10K in savings!!