Like a strong pound, rising house prices have historically, but fallaciously, been regarded as "a good thing". News of falling property values even a modest drop of 0.8 per cent on the month revealed by the Nationwide Building Society's survey yesterday are looked on with a sort of horror. True, the bubble has rewarded some. The "baby boomers" can look forward to a retirement, funded by the release of equity in their homes, far more comfortable than anything they or previous generations could have imagined.

Over the past few years quite a chunk of the population has seen the annual increase in the value of their home exceed their income from employment. In true Thatcherite style, home ownership has delivered prosperity and financial independence to millions. And, of course, the startling increase in property values and the financial dynamics of up-and-coming areas have fuelled countless middle-class dinner party conversations, for which we should perhaps be marginally less grateful.

This, however, has always been only half the story, if that. The other truth about housing in Britain is that an "own home" has become unaffordable, even for those on decent salaries. The plight of the first-time buyer has been well chronicled, and is real. In the rural parts of the nation, such as the south-west, the influx of second-home buyers has squeezed local people, especially key workers, out of housing altogether. Despite the Government's pledge on social housing which was one of the few positive products of Labour's deputy leadership campaign those at the bottom of the pile have little chance of owning the roof over their heads.

For all these groups falling house prices are a relief. And while the "credit crunch" is undoubtedly causing banks to tighten their lending criteria, especially to riskier borrowers, that too may be no bad thing for the long run. After all, the clue to the US "sub-prime" crisis is in the name lending to borrowers with poor credit histories, little capital and low incomes, ill-placed to afford their properties or the repayments. They are now beginning to default, sacrificing their homes (and pushing the credit markets into seizure). Our own "sub-prime" borrowers will no doubt be in for the same degrading process, once they too come off their low "teaser" rates of interest. Their misery is yet to be felt.

A cooler property market and a return to what the Chancellor, Alistair Darling, called "good old fashioned banking" might be welcome. Mr Darling might also like to look again at the manifold and irrational tax breaks that the state grants to residential housing. That is less likely, but no less desirable.