The majority of regions in England will see average house prices fall in 2008, with the West Midlands at the bottom of the pile, according to the latest research from Your Mortgage magazine.
House prices are set to drop by 3.5 per cent while Birmingham is predicted to suffer a decrease of 3.7 per cent.
The only regions expected to experience growth this year are London and the North.
Inner London is forecast to be the best-performing region with an increase of 4.6 per cent. House prices in Greater London will not be far behind, with growth of 4.3 per cent.
However, while most areas are expected to see prices fall in 2008, the majority will recover and experience growth in 2009 and beyond.
All regions are expected to have posted improved figures by 2012, although some rises are set to be far more modest than others.
Average house prices in Walsall are only expected to improve by 1.1 per cent by 2012, for example.
Pauline McCallion, editor of Your Mortgage, said: "Although property values in most areas across England are set to drop by some degree in 2008, prices will recover in 2009. The majority of English homeowners should take comfort in the fact that any decrease is likely to be a distant memory by 2012."
Property consultants Chesterton's, which carries out a so-called House Price Poll of Polls, after analysing everyone else's predictions, is equally gloomy.
Douglas McWilliams, chief executive of cebr, which produces the research, said: "Most economic commentators including me think that house prices will fall in 2008. Evidence suggests it will be the worst year since 1995 when house prices dropped by 1.7 per cent.
"What might make matters worse are the Home Information Packs which the Government introduced for all houses and flats on December 14. Before then there had been a surge of properties put on the market but since then the number has dried up. Home Information Packs are at best an unnecessary tax on home sellers and could cause an additional weakening of confidence."