House price growth will grind to a halt this year as the long expected slowdown finally takes hold.
Predictions for the property market during the year range from a rise of one per cent to falls of up to three per cent, but many commentators think prices will end the year flat.
The property market initially defied predictions that it was heading for a slowdown during 2007, with growth remaining strong during the first half of the year.
But by August, when interest rates had been raised by 1.25 per cent in 12 months, the brakes were finally applied to the market.
Higher borrowing costs and stretched affordability began to take their toll, while potential buyers sat on their hands amid uncertainty over the direction of the market.
By the beginning of December there was little doubt that the market had run out of steam, with Britain's biggest mortgage lender Halifax saying house prices plunged for the third month in a row during November, dropping by 1.1 per cent - the first time they had fallen for three consecutive months since early 1995.
Nationwide also said that house prices were falling at their fastest rate for more than 12 years during the month, while property websites Rightmove and Hometrack both reported drops.
Most estimates think the cost of a home will have risen by between five and eight per cent over the year as a whole.
But as always, the headline figures mask considerable regional variations.
Halifax expects Scotland, where property remains most affordable, will have seen the biggest price gains during the year, with the cost of a home rising by 10 per cent, followed by London at nine per cent, and the South East at eight per cent.
But growth in other regions will have been more sluggish during the year, with the North-South price divide widening further.
Prices look set to end the year unchanged in the North West, while in Yorkshire and the Humber, the East and West Midlands and Wales they are likely to have risen by just one per cent.
House prices in Northern Ireland look set to end the year five per cent higher than they started it, although this gain comes on the back of booming growth of 53 per cent in 2006.
Going forward Halifax expects house price growth to stall during 2008 as the current slowdown intensifies.
The group said it expected to see a mixed pattern of monthly rises and falls, with prices ending the year at the same level they started it.
Scotland looks set to see the strongest house price growth, with the average cost of a home rising by four per cent, followed by London at two per cent, but it predicts falls of two per cent in the North, North West and Yorkshire and the Humber.
Nationwide Building Society also expects stagnant house price growth next year as the market undergoes a "significant slowdown".
But it said there are likely to be large regional variations, with Scotland expected to see price rises of four per cent, while at the other end of the scale the cost of a home in Northern Ireland may fall by five per cent.
Other areas that will see price gains are London and the South East, where the property shortage will push prices up by around one per cent during the year despite affordability constraints.
But prices look set to fall by two per cent in the North and North West, while they will slide by one per cent in the South West, Wales and Yorkshire and Humberside, Nationwide said.
Property website Hometrack expects prices to edge ahead by one per cent in 2008, with prices falling by 1.5 per cent in Wales and the North East.
It has also pencilled in drops of one per cent in Yorkshire and Humberside and 0.5 per cent in the North West.
The group is also anticipating a 17 per cent drop in the number of homes changing hands.
Richard Donnell, Hometrack's director of research, said: "The greatest casualty of the current slowdown will be property transactions rather than house prices."
The Council of Mortgage Lenders is also predicting a fall in sales, with transactions dropping by 14 per cent to just over a million during the year. The group expects house prices to edge ahead by only one per cent in 2008, while property website Rightmove expects them to be unchanged.
Capital Economics is more gloomy about the market's prospects, predicting house prices across the country will fall by three per cent during both 2008 and 2009 as the recent credit crunch exacerbates the current slowdown.
It said some areas of the country could see drops of six per cent, with the North West and Wales likely to be the worst affected regions, while prices are expected to fall by 5.5 per cent in the East Midlands, and the North could see drops of between four and five per cent. However, it warned that with prices falling by 2.3 per cent during the three months to the end of November, its predictions were beginning to look "too conservative".
Ray Boulger, senior technical manager at John Charcol, is also expecting price falls, predicting the average cost of a home will end 2008 two to three per cent lower than they started it.
Indeed accountants Grant Thornton has suggested house prices could end 2008 10 per cent below the peak they reached in August last year.
A fall of this level would wipe around £400 billion off the nation's wealth held in bricks and mortar.
Meanwhile, in the US, where the recent economic woe began with the sub-prime lending crash, home sales rose marginally in November, the first increase after eight straight months of declines.
Sales were ahead 0.4 per cent to an annual rate of five million units, up from the upwardly revised annual rate of 4.98 million for October.
However, sales are 20 per cent below the rate of a year ago, and the median home price has dropped 3.3 per cent in the past 12 months. ..SUPL: