Home "ownership" is, I would argue, now fundamentally programmed into the UK/USA mindset (and soon to be Asia). Attempts to model it in traditional ways just won't work. Logically we know that paying £x for an apartment (as I am considering) is ludicrous - but I will do it nevertheless as it is a place to live that require no future income stream in X years.
We have three primary classes in the UK: the Gentry (land owners for at least 7 generations), the Poor (social housing, social pay), and the Middle Class. The noise, as ever, is around the Middle Class as they aspire to the Gentry and hope to avoid the Poor.
I do believe the "price" of UK housing will fall, and given that inflation is 12-18mo away, it would appear to be nominal in the 1st instance. After that though, looking at the bald numbers will help little if, as I suspect, the cost of a pint of milk (for example) will be approaching £2 by 2011.
B