<p>Given that David Miles, Morgan Stanley’s chief economist and author of the Treasury’s much ignored review of the mortgage lending market, warned in an Financial Times front page lead that a housing market collapse was on the cards within the next three years, I’m beginning to wonder whether he’s read Kate Barker’s review of housing supply. According to Miles, the more than doubling of house prices over the past decade “can only” be explained by people’s demand for housing having been driven by the expectation that rapid price rises will continue.</p> <p>He asserts that once the country has come to its senses “a sharp fall in real house prices is likely at some point in the relatively near future.” And he reckons that “more than half” the increase in prices over the past ten years has been driven by speculation that prices will continue to rise rapidly and that less than half the rise was due to “population growth, income growth and low interest rates.” I’ve no idea how anyone could reasonably assess just what proportion of the rise can be attributed to speculation of continued growth as opposed to what could reasonably be termed Barker’s factors. Perhaps Miles felt …