The best thing that didn't happen in 2005 was a housing market crash.

This time last year it looked at best an even chance. For the historically minded it was a near certainty. There had never been a boom like the housing market's celebration of low interest rates without a bust at the end of it.

If you preferred economic fundamentals you didn't see how house prices could hold up when first-time buyers could no longer afford them.

Either way, the conclusion was the same. Beware. Roger Bootle said so and nobody has a better crystal-gazing record - he wrote a book called The Death of Inflation well before anything of the sort seemed likely or even possible.

Yesterday Mr Bootle accepted he was wrong. He had already adapted his warning from an outright slump to a 20 per cent slide in house prices from peak to trough spread over a number of years.

He has still not abandoned his position that house prices are heading down rather than up. His forecasting company Capital Economics now expects them to drift about five per cent lower over the next two years - with an out-side chance of a sharp fall if the wider economy runs into trouble.

What matters is that not even Mr Bootle now sees the housing market causing that trouble - and you can hardly expect him to go along with the optimism of the Royal Institution of Chartered Surveyors. His position, though, is not all that far from that of Halifax's economist Martin Ellis, who expects house prices to lag a bit behind earnings for a while.

By hindsight we can see what went right. First, although unemployment has been creeping up, the number of people in work has been rising, too, to an all-time record of 28.8 million.

Pay deals may not have made up for the price of oil - let alone council tax - but earnings have kept ahead of inflation. Most of us are a little better off.

Interest rates never went beyond 4.75 per cent and the Bank of England trimmed them once they had clearly done their job. Home-buyers were never faced with mortgage payments they simply couldn't afford. Those who felt sore when their fixed-rated or discount deals ran out could usually re-mortgage without fuss.

Anyway the banks, building societies, and many of their borrowers had learned their lesson. The crash of 1991 lingered in the folk memory.

Few of the new generation of home-buyers exposed themselves to the risk of 1991-style negative equity if house prices did tumble.

Only five per cent of new borrowers took 100 per cent loans in early 2005, Mr Ellis says, against 22 per cent in 1990. Indeed, 81 per cent borrowed less than 90 per cent of the price of their homes. In 1989/90, at the peak of that boom, only 56 per cent were so restrained.

True, there is a fearsome debt mountain out there - though it is no longer keeping bargain-hunters out of the shops. The unsecured side of it may well end badly.

But mortgages, even those used to buy cars and help with university fees, look compatible with both house prices and earnings. ..SUPL: