So what are the predictions for the UK's house prices?

I find that predicting house prices in the UK has become very unpredictable, many analysts are increasingly reluctant to give any predictions for more than six months hence.

Capital Economics, the consultancy led by Roger Bootle, expects house prices to fall 5pc this year, and 10pc in each of 2011 and 2012.

Why they could fall:

The number of sellers are starting to exceed buyers, which is putting downward pressure on prices.

• Interest rates are currently at record lows, but are likely to be rising in 2011 and 2012. This will come as a shock to homeowners who have got used to record low mortgage rates.

• Fiscal Squeeze and dangers of double dip recession. The government have announced plans to cut spending from 2011. This will lead to job losses in the public sector and negatively impact on economic growth. With unemployment still very high this will lead to more homeowners struggling to pay their mortgages which might result in them putting their property on the market.

• New criteria for mortgages makes it much harder to get. New home owners are increasingly have to save a larger % of their house as a deposit. (though there are some promising signs of a thaw in mortgage conditions. Though I feel if house prices were to reverse, banks would return to being risk averse and be reluctant to lend without large deposits.

However why they might not fall…

• The worst of the recession may be over. It is hard to see a recovery as being anything other than slow. However, at 2.5 million unemployment may have peaked, and could slower recover, as long as recession doesn’t continue.

• Low Interest rates may remain. Given the fiscal squeeze, it is more likely the Bank of England will be able to keep interest rates at record lows.

• A rise in base rates may affect mortgage rates less than expected. With base rates falling to 0.5%, many banks failed to pass the base rate cut onto consumers, preferring to increase their profit margin and encourage savings. If base rates did rise, the impact on mortgage rates would certainly be less.

•The number of sellers may fall if house prices fall.

• In Southern England there there is always a lack of housing, demand always outstrips supply.