Today we obtained a rare unspun glimpse into government housing policy through leaked documents from the current Government Housing Minister fall gal... Caroline Flint MP.

The key messages we take away from this document are the following:

1. [House prices] will clearly show sizeable falls in prices later this year - at best down 5-10% year-on-year.
2. We [the government] can't know how bad it will get.
3. [Caroline Flint] will tomorrow announce a package of meaures to assist first time buyers.

We'd like to focus on the last point, by what measure of ineptitude does the government think that helping first time buyers into this market is assisting them? Despite clear knowledge that housing is set for a fall and possibly a big one, they are intent in sucking more unwary and vulnerable people into a waiting negative equity trap.

We've become used to successive housing ministers indulging in the normal reorganisation of the deck chairs onboard the Titanic but it seems the ante is now being upped with the government planning to go all out to help young families on board with cut price tickets.

Further down we have the real insight into government thinking:

"it is vital at this time of uncertainty that we show that we are on people's side"

With friends like these who needs enemies?!

This brings us onto the bigger question, do we perhaps have the only government in the world committed to maintaining prices at unaffordable levels that were only achievable through the mother of all mortgage lending bubbles? It seems perhaps we do... we wonder would it would take to actually get Labour, or the Conservative party for that matter, to admit that house prices are simply too high and need to fall.

It seems clear to us at a time of falling prices, with negative equity looming for the over-stretched, that first time buyers should be wary of rushing in and perhaps wait until prices become more affordable. By the government's own expectations waiting till the end of the year will save you at least 5-10%.

Now is the time for the government to finally disentangle itself from this housing boom, and to distance itself from maintaining it, not to become complicit in the financial ruination of more young families.

Home Truths is the new comment and opinion section of the PricedOut Blog.