Soft as houses.

Just a few weeks ago, I was telling readers that the UK's housing market is populated by greater fools. That's another way of saying that too many housebuyers make their purchase on the assumption that somewhere there is a greater fool who will pay an even higher price than they did. If I believed that - and I do - then it would have been logical to put my money where my mouth is, and get exposure to some sort of instrument that will gain when the greater fools melt away - in other words, when UK house prices stagnate, or worse. Typically, however, I did nothing at all, which itself is pretty foolish. But now is the time to put that right.

The question is: how, exactly, should I seek to play a falling housing market in the UK? So far, I have managed a similar scenario in the US tolerably well. That is through the Bearbull Hedge Fund's short sale of shares in building materials supplier Wolseley, which gets approximately two-thirds of its profits from the US. Admittedly, I sold Wolseley's shares far too early - at GBP12.19 at the end of 2005, since when they have topped GBP14 - and it's only recently that I have broken into profit. Now, though, even Wolseley's relentlessly upbeat bosses acknowledge that the fall in US housing starts is hitting group profits, and the company's ...