The bricks and mortar that millions of Britons have seen as the foundation of their financial future are crumbling - or at least their value is. It is now incontestable that, after a decade in which the house price boom made buying a home a one-way bet, a residential property slump that is likely to prove about as severe as the crash in the early Nineties has taken hold.

No one can be sure how far, or how fast, the market will fall. But a series of factors that are undercutting prices makes it odds-on that things are likely to get much worse, over a lengthy period, before they get better.

Most simply and crucially, with average house prices up threefold in a decade, a steep correction was overdue. Expert estimates of the extent of the overvaluation of house prices range from 25 to 40 per cent. While, on average, economists are predicting that prices will fall by 15 per cent by late next year, many believe the ultimate decline could be between 20 and 35 per cent.

The threat that prices still have a long way to fall is exacerbated by several far-reaching problems.

The most critical is the drought in the mortgage market, with loans much harder to come by and those that can be had more expensive. New mortgages agreed have plunged by two thirds to a record low. And while the average rate charged on a two-year fixed rate loan was less than base rate until late last year, it is now 1.3 percentage points above.

At the same time, would-be buyers are being driven from the market by the expectation that by waiting for months or even years they will be able to get a better home for less.

A final, vital factor is now emerging as unemployment starts what looks like a sustained rise. As in the early Nineties, this is liable to lead to more defaults of mortgages and forced sales, adding to the stock of unsold property in a market with scant demand, and piling more pressure on prices.

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