By David Lawrenson

It can look very grim out there in the world of residential property investment.

The rate of annual house price inflation is expected to turn negative next month as the Nationwide's measure of house prices fell for the fifth month running with the annual rate now at just plus 1.7 per cent - a 12 year low.

At the same time the UK consumer has cut back on household spending - spending fell by 0.1 per cent in the final quarter of 2007 according to the Office for National Statistics. Consumer confidence is now at a 15 year low according to the GFK NOP rolling research study

The usual suspects in the press and the city including perennially down beat Capital Economics - predict that house prices will take quite a tumble - leading to even more careful lending by the banks and building societies and hence even greater pressure on house prices. A negative feedback loop if you like.