So what next for house prices? There is still this view floating around that once things settle down, house prices will soar again thanks to the so-called under supply of property. It is a view promoted especially vociferously by the Centre for Economics and Business Research, and more recently by the National Housing Federation which predicted a 25 per cent rise in house prices between now and 2013.

The argument hinges on this idea of a shortage of homes. Demographic changes make future rises in house prices inevitable.

But this morning came a report from the Halifax that may blow that argument right out of the water.

First, rewind the clock back to last May.

Back then, Capital Economics released a report suggesting that, actually, many homes in the UK are under-occupied.

So, what is meant by under-occupied? Well, for a home to be under-occupied it is assumed there’s one bedroom for every married or co-habiting couple, a bedroom for every single person over 21, and a bedroom for every pair of adolescents of the same sex between the ages of 10 and 20. But, and this is the key bit, if there is one extra bedroom, the layout is described as “comfortable.” The house would only be defined as under-occupied if there were two or more excess bedrooms. The house would be considered over-occupied if there was one or more bedroom under the standards described above.

Apparently, according to the Survey of English Housing, no less than 47 per cent of existing owner-occupier dwellings – that’s 6.8 million homes – are under-occupied. Tellingly, only 18 per cent of private rented properties are under-occupied.

Why do we see this level of under-occupancy?

It is assumed that home-owners are effectively speculating with their home – they see all that spare space as an investment.

You would imagine, then, that in times of a housing slow down, many of these owners of under-occupied homes may re-think. And that is where the report from the Halifax comes in.

The Halifax surveyed 2,000 adults and found that one in four people (26 per cent ) would consider buying a larger home or expanding their current one in order to accommodate additional family members, and over a quarter (27 per cent ) would consider jointly purchasing a larger home with their parents or in-laws as they grow older. The survey results suggest that, although the majority of Brits (67 per cent ) currently live with immediate family, such as their partner and/or children, this is likely to change in the future.

Head of Underwriting at Halifax Home Insurance, David Rochester, said: “The current economic and social climate in Britain is showing a shift towards several generations living together under one roof. This is something that used to be relatively common in the past. More recent years have seen an increase in independence and people moving away from this trend, however, changing financial pressures, plus the desire to look after the family and enjoy having them around seems to be showing a shift towards multi-generation households again.”

In other words, the argument that house prices will inevitably rise in the long run because of a shortage of homes relative to demand is a load of old, ummm, well, may not be quite right.

PS One could take this argument a step further, and argue that the credit crunch has made divorce too expensive; that all those couples who were splitting up, and buying two properties when prices were booming, are now staying together.

Who knows, maybe the credit crunch will mean less divorce.