You may recall, last month Halifax rather put the cat amongst the pigeons when its latest housing survey reported a 1.9 per cent rise in house prices. Was this a one off, or an early sign of a change in trend? Was the great housing crash nearing its end?

One obvious puzzle relating to the Halifax figures was the way they contradicted the data from Nationwide covering the same month. The Nationwide had prices down 1.3 per cent, so how do you explain that? Well, some argued that, actually, the time periods the Halifax and Nationwide covered were slightly different, with some of the data which made up the Halifax survey coming later.

So all eyes then turned to the Nationwide report for February. Would we see confirmation of the rise reported by the Halifax a few weeks ago?

This morning the Nationwide released its February survey, and this is what it had to say.

For February, the Nationwide reported a 1.8 per cent fall in prices. It has now had prices falling for 16 months in succession. During this period the average monthly fall was 1.24 per cent, so the February data came above average. No sign then of a pick up.

The Nationwide has the annual rate of house price inflation coming in at minus 16.6 per cent. The building society recorded house prices peaking in October 2007, with an average price of £186,044. The latest average price comes in at £147,747, which means prices have now fallen by 21 per cent from peak.

Of course, for much of last year, the economists from the likes of the Nationwide and Halifax predicted percentage house prices falls in single figures. So, they have lost a degree of credibility.

So with half our mind on their track record, which is awful, let’s see whether the Nationwide can put a positive gloss on things

Well, it can, and the shiny gloss comes in the form of falling interest rates. Fionnuala Earley, Nationwide’s Chief Economist, said: “Amongst mortgage holders alone, the average weekly spend on mortgages was £138.80 per week, about 14 per cent of the total household weekly spend. Given its share of the household budget, changes in housing costs can have a real impact on the overall disposable income of the household… For existing borrowers on variable rates with a typical loan size, the reduction in interest rates since 2007 has led to a significant reduction in mortgage payments. About one third of the overall stock of mortgages is on a base-rate tracker mortgage. For these borrowers, the 4.5 percentage point fall in rates seen since the end of 2007 means that their monthly mortgage payments have fallen by around £240 per month. Those on standard variable rates have seen a fall of a similar amount. Unsurprisingly, those borrowers in the highest priced areas have seen the biggest change to their housing costs, with Londoners seeing monthly savings of more than £350 and those in the Northern region seeing nominal falls of just less than half this amount.”

In other words, mortgage holders are getting better off; actually, quite a lot better off.

Ms Earley reckons this may explain the recent surprising pick up in retail sales, reported here yesterday.

But will it help boost house prices?

It seems there are various forces coming together. The fact that houses are now cheaper, and mortgage rates are so much lower, may encourage some to buy. But the shortage of credit may mitigate against this.

But perhaps the key lies in expectations.

If banks expect prices to fall by, say, 20 per cent, then it would seem hard to explain why they would offer a mortgage worth more than 80 per cent of a property’s value.

As for buyers, it also boils down to what they expect. If they think prices will fall, they will hold back; if they think prices will recover, they will jump back in again.

It has been said here that the belief that house prices always go up is so entrenched within the British psyche, that buyers may well be tempted to conclude now is a good time to buy, and those who can acquire credit, may well jump back in.

But, and this is the caveat, those who argue falling interest rates will lead to a pick up in prices are actually basing their assumption on the belief that we have learned nothing.

Interest rates go up and down; surely everyone has absorbed this lesson now. Just because mortgages are cheap now, it doesn’t mean they will be cheap in two years’ time. People who are seduced by low rates to start buying again, could be repeating the mistakes of the sub prime lending in the US earlier this decade.

And never forget, if deflation really does become entrenched, then actually, in real terms, even a zero rate of interest is quite high.

Basing affordability of houses on the current rate of interest, and extrapolating movements in house prices from this, makes no sense. If buyers are sucked in by low rates, then we would say that, sadly, the lesson of the credit boom has not been learned.