DavidJ

The banks have tons of money. They are creaming off loads of money from the stimulus package and keeping it for themselves. The BOE keeps pumping more money in because, hey, inflation is low! So money keeps going in to support house prices whilst over prices drop. The BOE are taking a very one dimensional view to inflation and stimulus. At some point the government will completely U-turn on banks (such as Lord Turner's new tax idea) and then round two of the craziness will kick off. Whether round two will be another recessionary dip, a further slant in house vs consumer goods prices, etc I don't know. But at least it will be interesting!