Homebuyers are not the only people to have come a cropper after swallowing the myth that property prices could only keep rising.
Birmingham City Council, which plans to pay for a large proportion of its capital expenditure by raising money from selling land and buildings, must be eyeing the worst recession for 70 years with increasing nervousness.
The official line at the moment is that expensive schemes such as office rationalisation, the new library and 50-metre pool, are long term projects. The value of land, it is suggested, will not be depressed for ever.
That is undoubtedly the case. The property market will recover and the council will be able to get the hundreds of millions of pounds it expects and needs by selling valuable sites like the wholesale markets in Digbeth.
The question to which nobody knows the answer is: when will the turning point come? If 2009 is to be a year of recession, what about 2010, or 2011? The gloomiest predictions suggest 10 years of depressed property prices.
What, then, happens to Birmingham City Council’s spending plans? This year’s revenue budget is already heading £14 million into the red, but that figure can be reversed fairly easily through spending cuts and efficiency savings. A far more troublesome issue concerns the money that must now be borrowed in order to deliver the grand building projects that have the personal backing of the council leader.
As anyone with a mortgage will know to their cost, money that is borrowed has to be repaid with interest. The council may find itself in a position where it must choose between higher taxes and cuts in services in order to balance the books.
But on the brighter side, had the recession happened six years ago when Birmingham was a financial basket case, the council would be staring bankruptcy in the face by now.