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 The governor of the Bank of England has today (June 26th) predicted a "period of extremely weak activity" in the housing market.
Mervyn King appeared at a treasury select committee after last week's announcement about inflation rising to 3.3 per cent, which required him to write an explanatory letter to the chancellor.
And commenting on the housing crisis, Mr King explained that the behaviour of prices over the coming months would be extremely difficult to predict.
He said: "None of us can really know where house prices will go. We are going through a period of adjustment now because any prospective purchaser can't really judge the likely level of house prices and where they'll settle.
"It would be a very natural response to pull back and to wait until the market's reached a new equilibrium before coming in."
In addition, Mr King reiterated his belief expressed last week at his Mansion House speech that falling growth and house prices would add pressure to the finances of many families.
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