Professor Alan Ahearne:

There was a consensus that there was going to be a soft landing. That was a very general consensus, including, I think, across the political system. I did not move back until 2005 so I cannot speak of what happened before then in terms of the politics. I do remember noting in the run-up to the general election in 2007 that none of the political parties was recommending the sort of policies that one would have needed to stop the bubble, which were to get rid of tax deductibility of mortgages; force much higher loan-to-value ratios, perhaps with new regulations; and increase income tax. I presume that if a political party wrote down those policies as an election manifesto, it would not get elected. However, that is what it would have taken in those days to try to stop the bubble.