Few people are conned by high prices for newbuilds: it is not the panacea you seek unless there is reform that removes Section 106 penalties, uneconomic greenergy standards, and encourages builders to divest their land banks as a starter.

The real answer is that mortgage lending must be tackled. Unfortunately, in the four years since the market peaked there has been nothing substantive done. Instead, existing mortgage holders have been heavily subsidised by low interest rates, and banks have indulged in a degree of forbearance that now concerns the BoE because it is storing up trouble. House prices are not falling because the few mortgages that are issued for house purchase average £140,000 according to BoE data – or 87% of the average house price. Banks have not used the lower rates to get borrowers to maintain their payments and increase their equity, and thus reduce the risk of negative equity as prices fall.

The subsidy to first time buyers of newbuilds is in effect a bailout for builders. On every measure it is wrong. The new FSA rules are a help – but the real problem is that average loan size needs to fall if the stock of lending and house prices are to deflate, as they must – because at present they are crowding out lending to industry. Mortgage lending is about the only sector that has seen the stock of lending increase (albeit modestly) since the credit crunch hit. It’s time that we worked on cutting it to help reduce the size of bank balance sheets.