At the Wriglesworth Consultancys great housing debate, pundits agreed that it would take a major economic decline for house prices to fall in the foreseeable future.
David Miles, chief economist at Morgan Stanley, says: Public expectations regarding house price growth is key to the markets stability.
Growth would need to fall successively for a number of months before peoples expectations, and therefore prices, were seriously impacted.
Nigel Terrington, chief executive of Paragon Mortgages, says there would need to be a major change in economic circumstances or lending criteria for this to take place.
He says: A serious correction in the housing market traditionally occurs as a result of a sharp economic downturn, which looks extremely unlikely.
It would take a reversal in recent increases of income multiples or a considerable tightening in lending criteria by banks, for there to be a serious downturn in prices.
Rising income multiples, the panel agreed, are the key to continuing affordability amongst homebuyers, and it is the responsibility of the lender to vet applicants thoroughly enough to filter out candidates who are unsuitable for higher borrowing.
Michael Coogan, director general of the Council of Mortgage Lenders stated that income multiples of six or seven are not out of the question.
Focusing on income multiples alone is not helpful they must be considered instead in the context of affordability.
Generally, if people are managing their debt on higher income multiples then this suggests affordability will allow it, as demonstrated by the fact that arrears are still historically low.
Miles adds: Fixed rate deals are often more suitable for those benefiting from higher income multiples, as they are able to eliminate possibly the biggest risk to their debt rising rates.