Long stagnation is extremely unlikely because the market has to be reasonbly active - deaths, divorces, people moving jobs or emigrating/arriving etc. That means there will be turnover and that means prices either up or down. If there's an oversupply of sellers - which seems likely - then prices will fall and probably fall quite sharply. As long as they are falling, there will be no discretionary buyers (those who can choose whether to buy). In addition, the market has a long way to fall before first-time buyers can actually afford to buy, particularly if lenders tighten credit and take a more realistic view of the housing market - that prices can go down as well as up and that capital has to be repaid. Add to that some short-term pain in financial and retail jobs, some BLT problems for the overleveraged and an increase in defaults by those who bought at the wrong time and the picture is pretty bleak.

Tim, London,

"It is not all doom and gloom. Sound demographics and supply constraints still provide underpinning."

Yeah right. And why are the number of properties on estate agents books rising if there are supply constraints. As to sound demographics where are all those people going to get mortgages now that lenders are tightening their criteria. Please spare us that well worn and now discredited spiel.

anthony, london , england

Property will crash by 25% this year and 15% in 2009. Interest rates will increase to stave off rising inflation driven by rising energy and food costs. Those people who think it will be a soft landing (5%) or even stagnation are away with the fairies.
There has never been a soft landing since records began. The ramping and the estate agency froth are not working any more. It is human nature that fear is a greater motivation than greed... Deal with it.
Guy, South Kensington

Guy Beckington, london,

It's all in the mind. A 20% fall tomorrow would leave only those who bough in the last two years an average loss of just 10%. Anybody who bought before that is still laughing, or at least smiling. And for the majority it is just a paper loss. The mortgage stays the same, you still have somewhere to live, your outgoings are the same.

Of course the market is going over correct. This is a fundamental aspect of markets cycles. The media have convinced the market that it is going to happen, and now it will., because buyers are hanging back waiting for it.

Let's bite the bullet and get over it.

Bob Travels, Stevenage,

Funny how the talk has now changed of a soft landing/stagnation period to large scale price falls.

Apart from those who have overstretched themselves and cannot pay their mortgages, and the sub prime buy to let sector, if the mood changes and people are no longer inclined to put all their spare cash/savings into what are essentially brick & wood structures with no productive capacity whatsoever which would be of benefit to the overall economy, then this can only be a regarded as a good thing.
And if people stop using their houses as cash machines to borrow against, maybe they will stop wasting money on imported consumer goods they really dont need, which will benefit both the balance of payments and landfill sites within the UK

rick, sydney, australia

I agree with the projected decline. I think it would be
better staggered so long as it is expected. Most people
seem to expect stagnation at worst, a 5% drop inconceivable.
and a 30% drop ridiculous. Journalists should focus on
US declines and Japanese declines following similar bubbles.
Instead I have read COUNTLESS articles about how the UK
is different, irresponsible to say the least. A sudden decline
would have very nasty consesequences, thosands of BTL
landlords bankrupted, families falling into negative equity,
foreclosures and a nasty recession. In April I expect a glut
of BTL flats will hit the market - CRASH...

Mark, Epping, Essex