At the end of last year, the doomsayers were out in force. The housing market would crash, households would be left trapped in negative equity and the pain afflicting the real economy would finally catch up with the housing market.

They have been proved utterly wrong.

House prices have not fallen 7.9pc as predicted by Lloyds last October – a plunge the Resolution Foundation calculated would throw one in seven homeowners under the age of 34 into negative equity. And they certainly haven’t fallen by the almost 10pc the Office for Budget Responsibility was predicting at the March Budget this year.

Instead, house prices are down by 1pc on an annual basis to November, as reported by the Halifax house price index this week. And the most recent news is good news for homeowners: house prices rose by 0.5pc from October to November, a second consecutive monthly rise. Nationwide also sees a bounceback, with a 0.2pc rise month on month.

Not only was there no market crash, house prices remain substantially higher than they were pre-pandemic. Thanks to the Covid crash and the inflation crisis, there’s a good chance you’re feeling worse off now than you were a few years ago – but the average house is worth tens of thousands of pounds more.

These are economically unpredictable times, and it’s possible housing prices could still dip in the future. But there’s an obvious reason the fearmongering over plummeting house prices was wrong, and it’s the same reason that we should be sceptical of a serious housing crash in the near future.

It was best summed up by Halifax’s Kim Kinnaird, who said this week: “The resilience seen in house prices during 2023 continues to be underpinned by a shortage of properties available, rather than any significant strengthening of buyer demand.”

In other words, the vast undersupply is continuing to do what it’s done for decades: drive house prices up to ludicrous levels that often don’t reflect what’s happening everywhere else in the economy, to the terrible detriment of younger generations.

No doubt many will say it’s a tough time to be a homeowner, particularly with a large mortgage. The surge in interest rates has been acutely felt by those still making repayments – a stress that will continue throughout next year.

At the height of the political crunch over mortgages this June, two-year fixed-term rates surpassed 6pc. With UK Finance estimating that 2.4 million homeowners would see their deals expire over the next 18 months, the calls for action were loud.

The Bank of England has made clear that no one should expect interest rate relief anytime soon. A decision to bring the base rate down will not come for some time, the Bank’s governor Andrew Bailey has insisted on many occasions. For now, anyone renewing their mortgage must remain prepared for a nasty blow.

But for all the difficulties homeowners face, the situation is far worse for those who haven’t found their way onto the housing ladder. That the housing market has defied predictions of a crash is not a sign of economic success, but failure: the failure of successive governments to reform planning and boost building to meet the rising demand for homes.

The hurdles are numerous. Politicians, especially within the Tory party, have constantly capitulated to the Nimby (Not In My Back Yard) tendency, which means that virtually nothing gets built. Homes, energy infrastructure and everything else needed to address the chronic housing shortage or prepare the country for a greener future crawl along at a snail’s pace.

Meanwhile, a disappointing number of Tory MPs have swallowed the line that housing supply has little to do with housing prices. It’s a convenient theory for politicians to grab hold of – building can be politically tricky, so it would be terribly convenient if it turned out not to matter.

The small issue remains that economic law – the simple rules of supply and demand – doesn’t dissipate simply because the public policy is difficult to design: that there was a massive fall in the number of homes built each year from the 1960s to the 2010s is a far bigger problem.

The Tory party, meanwhile, is increasingly trying to pin the blame elsewhere, mainly on net migration figures that saw an additional 745,000 people come to the UK last year.

Just as the laws of supply and demand don’t suspend themselves for those who say we don’t need more homes, they don’t stop working for liberals like me, who aren’t so fussed by this headline figure. It’s reasonable to ask if we have enough homes to support the number of people coming to the UK on an annual basis.

Of course practically every area where supply fails to keep up with demand – homes, GP appointments and so on – is heavily centralised and, practically speaking, controlled by the state. That the Government can’t overhaul the UK’s rigid and complex planning system is the fault of politicians, not migrants.

But even taking net migration out of the mix altogether, the Tories’ (now scrapped) housebuilding targets were still too low to meet demand. The UK has fallen so far behind on building over the past few decades, we are now in a position where a million new homes were needed yesterday.

I’m usually loath to jinx good news – but near-record high house prices are not the “good news” many have made them out to be. What some might call a “crash” would be more likely to reflect a market correction, which would still see house prices far beyond the median-salaried worker’s comfortable reach.

And that’s if prices drop. In January 2020, the average house price was £231,000; after everything the UK economy has been through, it’s now £291,000. Anyone who thinks this will change for the better without major policy reform (or a spectacular, unknown economic event) is kidding themselves. Even a temporary fall would likely correct itself in a matter of years.

The continued rise in prices, and the lack of any correction, are signs that the housing market is nothing like a market, but instead a rigged system in which those who already own homes will always be well ahead in the game – until politicians are brave enough to shake up the rules.