TURN back the clock 12 months, Manchester United were champions of England, the Labour Government were losing control of Britain's finances and house prices were robust and continuing to rise ... Nothing ever changes. Right?

Although Manchester United are again the English champions and Labour are as poor with accounts as John Terry is at taking a penalty, house prices are anything but robust or rising.

At the beginning of last year, the house building industry was buzzing with excitement.

Consolidation within the sector had share prices reaching for the skies and homeowners laughing all the way to the bank.

Now we have houses failing to sell because buyers are struggling to receive approval for mortgages and the building of new homes has begun to slow.

For the first time in nearly ten years, we are expecting to see the return of that Nineties phenomena, negative equity.

The UK listed house builders have enjoyed the meteoric rise of house price increases and seen huge financial gains as a result, but now they are building houses with little or no demand.

Last year, Taylor Woodrow and George Wimpey agreed a merger of their businesses.

Once the merger had been completed, the company was valued at more than £5bn and listed on the FTSE 100.

Both companies were the only UK listed house builders with significant US operations, which was seen as invaluable to add growth in revenue.

Today, however, the newly named Taylor Wimpey has fallen out of the FTSE 100 and into the FTSE 250, and is valued at little more than £1bn.

The conditions surrounding the UK economy have been described by many as the "perfect storm".

The rising costs of fuel, energy and food are all contributing to consumers reducing discretionary spending. Added to the reduction in mortgage availability and falling house prices, the outlook appears gloomy for the UK.

When the economy takes a turn for the worse, it seems to be the Government that is in the firing line, with accusations of inadequacy and procrastination when managing public accounts, and the inability to use economic stimulus effectively.

When an economy goes through a sustained period of expansion, such as the UK has over the past seven years, it is up to the Government to "save for a rainy day".

These savings can then be used to increase public spending and stimulate the economy when things take a turn for the worse. Unfortunately for the UK, the Chancellor of the Exchequer during this sustained period of growth was Gordon Brown and the "Iron Chancellor" got it wrong!

He spent money that did not need to be spent and sold vast quantities of our gold reserves at much lower prices than we are now seeing. However, it would be unfair to put all of the blame solely onto Mr Brown's shoulders.

The cheap credit issued by the major financial institutions has allowed the majority of consumers to live beyond their means for far too long.

Without the safety net of rising house prices, it is inevitable that consumer spending must slow in order to maintain some degree of financial integrity.

Consumers in the UK are among the most indebted in the world. It is estimated that total UK consumer debt stands at about £1.4 trillion, so it is not just Mr Brown who has failed to save for a rainy day.