SIR,

I was amused by the description in last week's Beacon of the 2009 housing market predictions made by Peter Bolton King of the National association of Estate Agents as "amazing" ("Backing for Housing Bounce" Beacon 31 December).

I would agree that what he said was hard to believe, but it is maybe not so unexpected from an estate agent desperately encouraging people to buy houses in a market as dead as the horse he's trying to flog.

I believe that expert opinion does agree with Mr Bolton King 's view that true house prices are already 20-30% lower than at their peak, and that a similar fall can be expected for 2009. Rather less plausible is his prediction that under certain very unlikely conditions, and in some places, house prices may possibly "bounce back" to anything like what they were at their peak.

I agree with him that house prices need to find their level, but we are a long way from that yet and in an economy trying to recover from the effects of excessive personal debt, the drivers for a new house price bubble will simply not exist.

Banks are trying to reduce their exposure to risk, and that means no more easy lending. Interest rates may be low right now, but that means nothing if you need a deposit of 25% of a very large amount of money to take advantage of them. Those who do have substantial deposits will be unwilling to see them evaporate in a falling market.

Suggesting that now is a good time to buy a house might have been considered reckless, but luckily it is such an obviously bad idea that nobody will take it seriously.

Why buy now when the you can buy in a year or so at 20% less - unless the seller will accept a realistic offer, of course. The longer sellers hold onto false hope the harder will be the fall when it proves to be just that.

Mr Bolton King's advice might better have been for estate agents to encourage sellers to set realistic asking prices so that the market can find its level and houses can begin to sell again.

Michael Panney

(Wonastow)