It has to be good news - it effectively means that our pound is actually worth something!

Which would you prefer - a mansion worth £400,000 or a 3 bedroomed house worth £500,000? No contest!

The more we can push the money out of property, the more we can turn to investing in manufacturing.

Andy R, sheffield,

Did any of the people commenting do economics? Supply and demand is what dictates the market not somebody who would like prices to be cheaper so they can buy a house. In 1992 prices were 20% lower than 1988 , by 1995 they were 5% above 1988.Once lending eases the market will come back.

Neal, Wokingham ,

I suppose on the bright side, with economic slowdown we can expect better Music.

Panic on the streets of London, now that moneys too tight to mention!

Mike, Tauranga, New Zealand

Shock horror house prices are so high no one can afford to buy one

Shock horro house prices are falling no one can sell

Great British journalists creating yet another monster story

Time to grow up please

Perry, London, London

As the crunch bites marginal buyers, who buy the cheapest properties are most affected. Hence the homes which sell are the most expensive in any band. This pushes up the average price.

So in fact real prices for any given property are probably much lower than the statistics suggest.

HaggardPete, Durham, UK

Why will there be a 'crash'. A crash indicates an uncontrollable and sudden set of events which cannot be predicted. House price falls are highly predictable and will balance out between seller and buyer over time. Those who don't need to sell will just wait until the market gets back into harmony.

pip, Croydon, uk

The blinkers of greed & complacency have been jilted off. Average salary in the UK 22k approx., average house price about 8 times salary. Forget a hugely optimistic 20 or 30% drop, 50% would be more accurate by any sensible measure.

Matt Houghton, Bournemouth, UK

It is a signal of economic change. It will affect all developed and developing nations. It is a post globalisation effect

Rahul Mate , pune, India

Where are all these stories of 6x salary mortgages come from? When I bought my placed 3 years ago, the most I was offered was 3.8 times salary. anyeone else I know has been the same .... so .... either the 6x thing is exaggerated or there were a lot of people lying about their salaries?

Mac, Manchester, UK

This is excellent news for the honest and hardworking people in this country who wish to own their own property rather than being slaves to buy to let investors.
Why doesn't the government raise the tax on buy to let income in order to free up this sector of the property market?

Allan, Inverness,

How painful listening to all the doom mongers forecasting the 'worst crisis ever'.
Nothing in this report mentions that there are plenty of places on the UK actually reporting an increase in prices: Cambridge, Carlisle, Canterbury, Aberdeen.
That doesn't make for sensationalist reporting though...

MarkyD, Aberdeen, UK

This is fantastic news! At last sense is about to return to the housing market. Speculation, greedy and easy bank lending drove the housing market on over the past decade and not value or real worth!

Wake up England, it's a bankers game, with and without the W. Gold is an investment, not cash.

David Downes, Chester, UK

Of all the tax incentives Labour could muster up in recent years it was an incentive via pension schemes to buy property, yet the 10p tax band had to go.

This crazy gov't with their crazy policies needs to take a long hard look at itself....and then resign.

Darren, Manchester,

We need a price drop of just 50% to undo a price rise of 100%... we will get there, hoooraaaayy!

Richard, London NW6,

A 7% fall in value in a year is a crash? Big deal! The prices have risen by 150-200% over the last decade. Like many first-time buyers, I'm still priced out of the market, and this is aggravated by the higher mortgage rates and large deposits required.

Ben Garside, Loughborough, UK

Steve sounds a really nice bloke.Why not stay in Australia Steve they probably need you more than we do.

Neal, Wokingham ,

That the property market is not too good, is possibly an understatement, but it has been fueled by the media. You only have to read the news papers, hear the news, to understand why almost everyone now accepts that the property market is not good. Many times it it better to keep ones mouth shut.

victor arram, westcliff,

A shocking drop for June - supposedly the best month. Also Nationwide went light on its seasonal adjustment this year. Last June it was 0.6%, this June its 0.4%, so the current figure could have been worse ie 1.1% fall. This means they'll have less upward adjustment for later when things go quiet.

Mike Livingstone, Reigate, UK

Why is the first word in the article "Fears". Could it not be "Hopes".

After all, for every seller there's a buyer.

Alex, Tunbridge Wells,

soon as a graduate i will be buyin a property.keep them droppin the prices have been high for so long people havent been able to afford anything, the rich get richer and the middle class gets poorer. so its about time we stop buying and watch the prices fall

ez, enfield, uk

Even if property prices were to drop 30%, they would still have doubled in the ten year period. This is still unsustainable considering the current climate of job losses, credit squeeze, and high inflation - classic stagflation territory. There will be a lot of pain in the next two years.

rick, glos, UK

we have sold my property in Australia, as we have put of comming home for years,but as luck would have it the aussie market has boomed and we have sold the house,so we hope the u/k market crashes,Cant wait

steve, brisbane, Australia

"Economists have scrambled to forecast an even more severe correction in house prices than previously". Oh Dear, and just when we thought housing was becoming more affordable we get economists catching up with the curve - maybe we're approaching a turning point already :=))

Robin, Hassocks,

I'm still surprised that anyone is surprised at this. Surely it's been expected for some time? Once houses became unaffordable for first time buyers, it had to happen.
Add to that the thousands of flats springing up everywhere.....

Mags, Wantage, UK

What a nonsense the so called percentage drop in values of properties is;Has anybody asked the estate agents what percentage of properties is selling.Nobody in their right senses and with cash in hand should be offering more than 75% of the asking price and it can only get worse.

Michael, Lindfield,

Why is it always "fears" (not "hopes") that housing will become cheaper to buy. Would it be "fears" if the oil price was to crash?

Tony Peterson, Kendal,

Fantastic news. Finally this ridiculous property monster is reversing. We may even end up one day with a proper economy that actually creates wealth and can compete globally. We may even be able to afford somewhere decent to live one day

Davie P, London,

Surely, surely there was no-one in the UK who thought the rises were going on forever and used their house as a sort of ATM. - Or was there?

Victor M, Cricklewood, London,

I was am international investor. Some say that central London was run by foreign cash,well thats not happeneing anymore, with people heading to dubai and the far-east. London is still unaffordable, at less than 7% return which is a peanuts relative to the international property market. SELL SELL!!!

Jaques, Newyork, USA

i wonder what happened to all to tv programs and presenters who where encouraging people to buy buy buy?
you can't go wrong can you with returns of 20 -30 % ????? per year.
where are they?

ebbi 581, valencia , spain

The reason house prices are falling (and will continue to fall) is that they were outrageously over-priced to begin with (both US and UK) and only dodgy financing schemes could get people into the bloated whales. It always comes down to reap what you sow.

Stephen, Fayetteville, NC, USA

The worst of all this is that there are no obvious solutions. The pound will fall and rates go up. Unemployment will now gather pace - back to the early eighties!

Chris Stuart, Carentan, France

This was so obvious and could have been avoided if the BOE had increased rate in 2005 instead of cutting them.How can anyone expect to repay a mortgage of 6 X salary with a 2% inflation target?

stephen hulton, eure, france