With UK house prices on average about 15% below their peak it looks as though we have fared well compared with the likes of Spain, the US and Ireland at 31%, 34% and an eye watering 53%. Repossessions also paint a relatively rosy picture. US banks seized over 3.8 million homes in the past 4 years compared with UK mortgage lenders’ less than 160,000 in the same period. However, therein lies the rub. Unlike their US counterparts who are typically locked into long term fixed rate mortgages many UK borrowers have been kept afloat by Bank of England rates at their lowest level since 1694 when records began. The problem is that low rates cannot go on forever. Received wisdom has it that as the US comes out of recession pressure will mount for rates to normalise across the globe. This would increase the number of repossessions in the UK resulting in a correction in prices of the order of 20% thus bringing them back to their historical link with earnings. On the other hand it may be different this time. Just don’t bet your house on it.