It would take a major economic decline for house prices to fall in the foreseeable future, which is highly improbable, experts agreed on Tuesday at The Wriglesworth Consultancy’s second annual Great Housing Debate.

David Miles, chief economist at Morgan Stanley said: “Public expectations regarding house price growth is key to the market’s 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 said that there would need to be a major change in economic circumstances or lending criteria for this to take place.

“A serious correction in the housing market traditionally occurs as a result of a sharp economic downturn, which looks extremely unlikely,” he said. “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,” Coogan said.

David Miles added, “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.”

The Great Housing Market Debate, the second in the series, was arranged by The Wriglesworth Consultancy and sponsored by SmartNewHomes.com, HeadlineProperty.co.uk, Hometrack, Paragon, Haart and C-NLIS.