By Ian Pollock
Personal finance reporter, BBC News
Business has dropped off suddenly for estate agents and lenders
There seems to be no doubt about it - house prices are going to fall this year.
That is the consensus view of property market experts who, just a few months ago, had been predicting that prices in 2008 would be flat or might even rise slightly.
Since the start of the year the credit crunch has turned off the nation's mortgage tap in dramatic fashion.
And a slide in prices that was already evident is now predicted to continue for the rest of the year.
Commentators with a vested interest in house sales are notoriously reluctant to suggest that their business may be heading for a downturn.
But, unmistakably, the evidence is staring everyone in the face.
NEW PREDICTIONS FOR 2008
Halifax "modest decline"
Nationwide "modest falls"
John Charcol -7%
Capital Economics -8%
"It is perfectly clear the pressure has been on the downside since the end of October when we made our last prediction, so prices are highly likely to go negative," says Sue Anderson of the Council of Mortgage Lenders (CML), which will publish its next forecasts towards the end of May once all the data covering the first three months of the year is available.
That view is now echoed by the UK's two biggest mortgage lenders, the Halifax and the Nationwide.
In the past month or so, both have decided that prices will now fall over the course of 2008 instead of ending the year flat.
"Things change day by day in the housing market, so we expect modest falls in 2008," says Fionnuala Earley, chief economist at the Nationwide.
"This will be due to poor affordability, weaker housing market sentiment and tightening credit market conditions."
In other words, houses are still too expensive, mortgages are much are harder to come by, and everyone thinks prices are likely to fall.
"Overall, we expect there to be a modest (low single digit) decline in UK house prices this year, " Martin Ellis, chief economist at the Halifax, said recently.
Capital Economics has long been the gloomiest forecaster of house prices, assuming you think that lower prices are a bad thing.
Its housing economist Ed Stansfield now thinks prices will end this year 8% lower than they started, but with more, perhaps much more, to come.
"The credit crunch has clearly been more severe and the speed at which mortgage lenders have headed for the exit has been unprecedented," says Mr Stanfield.
"Also, the economic outlook has darkened.
"In 2009 the economy will be slower than this year, so house prices will fall 10% further and we could easily see a third year of falling house prices in 2010."
Not everyone agrees, at least not yet.
The Royal Institution of Chartered Surveyors (Rics) has long had its finger on the pulse of the property market.
2008 PREDICTIONS at END OF 2007
John Charcol -2%
Capital Economics -5%
Its chief economist, Simon Rubinsohn, says the future trend of house prices is still very unclear.
"We have been waiting to see how things unfold due to all the uncertainties about lenders willingness to lend," he says.
"My suspicion is that the freeze that appears to be gripping the market won't reach a conclusion this year so prices will continue to slip, about 5% down this year.
"But we won't get prices tumbling in the absence of a major shock to the economy," he insists.
Pent up demand
The people whose business is now suffering even more than that of the mortgage lenders and estate agents are the nation's mortgage brokers.
HAVE YOUR SAY
Hopefully this is the end of the era of property speculation
Paul C, Stafford
Some lenders are trying to cut them out of the mortgage business altogether by offering new deals only to direct applicants.
But Ray Boulger, at one of the biggest brokers John Charcol, believes some predictions of prices falling by as much as 30% are exaggerated.
"At the moment I'd forecast a fall this year of about 7%," he says.
"But 2009 is particularly difficult to predict at the moment as the credit crunch may last for two to three years.
"But this in turn may lead the Bank of England to cut interest rates sharply, which may help stimulate the market, especially as there is now pent up demand from would-be first time buyers."