August 9, 2017 9:19 am

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Akhil Patel: You must not mix up what you regard as expensive with what people are prepared to pay. The reality is that people adapt to the property cycle rather than vice versa. They do so by changing purchasing habits. For example, more people buy as couples than before (hence higher incomes to service the debt); they borrow for longer; and interest rates are lower than they have been previously (lower debt servicing costs). And governments are putting in place measures to help people on to the housing ladder (e.g. Help to Buy).

All of this supports property prices rising to previously unimaginable levels. Also note that people were talking about house prices being expensive in the mid-1990s – and they rose significantly from then into the peak in 2007. People always think house prices are expensive. And they find a way to go higher.