As I was watching television the other day, it occurred to me that there was one part of the UK which had been completely unaffected by the downturn. Here, the words credit crunch had never ever been mentioned, let alone caused difficulties. Where was this utopian land that had shrugged off the economic hardships plaguing the rest of the country? Walford.

It is amusing to speculate what could have happened in Walford in the last year had the scriptwriters been given a free hand to reflect economic reality. There might have been a run on the Walford Bank; Bradley Branning’s former boss, the admirably complacent housing developer, would have been made redundant after a monumental drop in her company’s share price; repossessions in Walford would have dramatically increased; Walford market would have suffered a sharp downturn in business - you get the idea.

From a jobbing commercial property solicitor’s point of view, such stories are all too familiar. The main problem for my clients, who are in any way reliant on finance, is that the banks have not only metaphorically shut up shop but also gone away on indefinite leave without leaving a forwarding address. I can imagine, in a few months’ time, lawyers reflecting on the good old days when banks used to issue ‘offers’ as opposed to folding or desperately trying to offload huge amounts of debt for a fraction of their value. Frequently, this figure will be substantially above current market value. The seller is then forced to just ‘tough it out’ and hope that the market will turn shortly.

However, one indicator is worth paying attention to: the stockmarket. In his fascinating book Wealth, War and Wisdom published by Hoboken this year, Barton Biggs showed the ‘wisdom of the market’ was repeatedly proved during the Second World War. Financial markets aggregate the knowledge and expectations of their participants and have an uncanny way of knowing what the future holds. In retrospect, one can often look at a chart of broad-market indices and see that the market called important turning points by putting in a long-term bottom or top, even when those turning points were perceived by few.

Notwithstanding all the caveats above, there is a good argument to be optimistic about the long-term future. If the population continues to increase, there may be a resulting shortage of properties and this can only force prices up ultimately. Furthermore, there is generally an upward trend in the value of properties in prime areas. Indeed, trophy properties are usually resilient in a poor economic climate.

The current situation is not particularly helped by the government response. Increasing the stamp duty nil-rate band by £50,000 is largely cosmetic and will have minimal effect in London. It may have more effect outside London but sensible residential purchasers are far more likely to adopt a wait-and-see attitude.

It is worth recalling that the previous stamp duty holiday brought in by John Major’s government for the first eight months of 1992 completely backfired. The threshold for stamp duty was raised from £30,000 to £250,000 (plenty of money in those days). However, as UK property consultant King Sturges said, the effect was ‘a sharp temporary squeeze in the time taken to complete the average sale as buyers rushed in to complete before the holiday ended’. Prices actually fell in 1992 by 8.3% - the single biggest annual decline in prices ever recorded - and transactions were lower than at any other time in the last 34 years at 1.1m.

As almost every newspaper headline will remind you, we are living in a difficult, unpredictable era. However, remember that those who bought property in the darkest days of 1992 and then kept that property would have been wealthy 15 years later. Similar opportunities are arising again for those with foresight and a little courage. Now, what time is EastEnders on?

James-Guy Jacobs is an associate at Freemans Solicitors in London