Who's afraid of the housing market crash? Not I

One thing has struck me about the housing market at the moment. Everyone knows the housing market is in dire straights, in Manchester, house prices are falling at the fastest rate for 18 years, and in Liverpool the average cost of a property is 12.7% lower than a year ago, and still falling. It is clear that anyone who owns a house is going to be poorer.

I don't own one, and frankly, if in 3 years time house prices have plummeted, then so be it. I imagine that this is the way the majority of non home-owners feel, in particular undergraduates, who will almost certainly be going into a much more affordable market. House prices have been getting out of hand for years now, and this is clearly the result of the over-inflated cost of buying a home. Around a year ago, house prices in Britain were said to be overvalued by 65%, a terrifying figure for first-time buyers. It is surely about time that the market returned to a sensible, affordable level.

I think it is a bit rich of banks to expect the government to bail out the market, as has been proposed. Fortunately for people who don't own homes, it appears that both Alistair Darling and Mervyn King have indicated their unwillingness to support any such plans. It seems unfair to me that a business should be bailed out with the taxpayers money when it seems it is almost certainly there fault that this has happened.

There is no doubt in my mind that the housing market had gotten out of hand. Although few saw it coming, in hindsight, it had clearly become unsustainable. How long this goes on for can only be guessed at, with many experts suggesting that house prices may continue to fall until 2010 before improving. I think that in reality, for every winner in this whole affair, there will be a loser. The good news for me is, it doesn't seem to be going too badly on the student side at the moment.

With thanks to the Fleet Street Invest daily

£1,000,000,000 on Iceland, at what price?

I am going to have to go back on my pledge to talk about things other than the ghastly credit crunch. There just isn't anything else other than that going on. In fact, it has infiltrated every aspect of anything that involves money. The collapse this week of the Icelandic bank Landsbanki has shown how far and wide something can spread.

Now when I heard that a few Icelandic banks had collapsed, it all seemed a little irrelevant to me. I mean, what difference could that really make to you and me? Well a lot more than I thought, apparently.

Up to £1bn has been deposited by local authorities across the country into Icelandic banks. My first impression was, why they can't just put it in the bank down the road like any normal person?. However, this is not just your standard current account. This is money deposited with the intention of making money. Inevitably, when you stake money, you run the risk of losing some, or even all of it. In fact, this sounds an awful lot like gambling to me.

All over the country, councils are preparing for the worst, as although many believe their money will be safe, many know that there is no guarantee they will ever see their stake again.

Both Wirral and Cheshire councils, for example, have bonds and investments totalling around £19m, small in comparison to the £1bn total, but a huge amount that could've gone a lot further than paying for some Icelandic millionaire's indulgence, which has clearly gone on for a little bit too long.

It seems, however, that everything is going to be ok. A spokesperson for Wirral Council played down any major impact, claiming that their investments should be honoured, and also citing the fact that they had earnt £4m in the previous year through investments. It all seems a bit ludicrous though to me. Surely the authorities can't afford to go risking large sums of taxpayers money on questionable investments. It seems that whoever is gambling has got away with it this time.

Wirral and Cheshire council millions at risk in Icelandic banks