I think a median of the forecasts is about right. At least we all agree on one thing, the forecast is down, and probably for a three year period. I have been suggesting investors take a long hard look at the UK, because there are good buys to be had, it just takes a great deal more research and harder bargaining than before. My personal aim is to get at least 15 per cent off a realistic valuation at today's rate. I reckon that will cushion any further slide - and still allow a good rate of appreciation when the market bounces back.

To give an example, it's taken me 6 months to find a suitable property in the north west that I am prepared to buy. I have viewed scores in the meantime and attempted negotiations on a dozen or so, all of which I failed to get the price low enough (for me). The one I have finally started buying is a 4-bed terrace in good condition, close to a main railway station, shops, etc., a good rear courtyard and fully modernised (gas C.h., Dbl gl, and so on), and in an area with a good supply of potential tenants. Purchase price agreed: £115,000. Now, anyone care to tell me that's not a decent purchase?

I'm anticipating it's real value now is about £135k, so it ticks the box for my strategy.

The point I'm making is, find the right property in the right place and negotiate the right deal (hey, isn't that what we investors are meant to be doing all the time) - and the UK becomes the enduring and reliable market it has always been worth investing in - and still is, even amidst the present turmoil.

Tony B

In this market if the developer isn't willing to give you 30-40% off a realistic market valuation I would walk away from it

There is no lack of these deals if you know where to look for them - developers will literally pay you to take it off there hands, but again it all comes down to getting the finance as most lenders are offering 6.49-6.99% with 75% LTV and 115-120 rental cover, irrespective of what the deal is this doesn't stack up !

Quirky, I should perhaps have qualified the fact that I reckon most new-build deals don't stack-up either. In fact, most fail at the first hurdle, because the 'real market valuations' are far from current asking price less negotiable deduction or 'special offer'. Personally, I have stopped looking at new-build and instead I'm giving my time and effort to the secondary market - where success in negotiating a low deal is more likely. I also agree, there are substantial financial (borrowing) difficulties and restrictions on LTV are making some investors hang back. My strategy doesn't rely on a high LTV, so I'm not so much affected.

Tony B

When does a property price correction = a crash?

Since property prices are overvalued by 30-40% at the moment, then clearly this "correction" down will equate to a property crash in any bodies books. This latest -2.5% fall indicates that the property market is falling FASTER than in the 1980's crash.

This is most likely the effect of mass media in the digital age. The interesting question we should all be looking at is how else will this effect this round of price corrections?

Some might make the arguement that the falls will sharp and quick then bounce back - however the evidence is just not there for this if we look across the pond. Yes there are big differences between the UK and US property markets but as of yet there is NOTHING that suggests that prices will just bounce back.

Another key point that puts things in perspective ..... UK market has NEVER been so overvalued - even in the 1980s it was nothing like today.

The recession in the UK (recession always follows house price crash) has only just begun - a long way to go yet.

Another prediction for you ..... the US dollar rally has finished, - time for another 10% drop.

Gold will rebound soon - I seriously doubt it will go below $850 - and when it rebounds it will be strong this time as it will likely happen at the same time as the dollar tanking and oil climbing higher. I still think Gold will go above $1500 an oz this year.

Interesting times.

Sorry but I think most of that is just rubbish !

A recession is 2 quarters of negative economic growth / GDP and is not linked directly to property prices, however can influence the sentiment to buy - we havent had any quaters of negative growth as of yet

In terms of correction V's Crash there is a very real difference, a correction is due to a market over valuation (ie dot com bubble burst) whereas a Crash is a price decreases over a 12 month period resulting in negative equity due to debt leverage often influenced by socio economic factors such as disposable income or interest rates.

Interest rates are fine as is disposable income, the problem is a correction in particular within the new build flat market - but not necessarily across the whole market. Many houses have increased in value but as the ratio of flats to houses is higher it gives the average market price the impression that its decreasing.

In terms of "there is NOTHING that suggests that prices will just bounce back"...... of course there is, in the Uk there is a serious supply and demand issue, people /first time buyers cant afford to get on the housing ladder and an aging population who are having to sell there houses to affoard to retire but still wish to live within the propertes - all of which point to a strong rental market

In terms of the US Dollar I agree It wont rally again but all you are seeing is the old global economy (USA/UK/Euro) aligning to the new economy (Brazil/Russia/China and India) and many analyst strongly agree that commodities will equilabrate this year.

So in conclusion the market is changing and the old titans are struggling, whilst the new kids on the block are feasting

We will see a challenging economic climate including property for the next 18 months, largely due to inadequate liquidity in the financial markets but after that we see growth

No one said property was for short term investment and the faint hearted ! If anything it will remove some of the arm chair investors who have caused many of these problems and leave the market to serious investors who base there decision making on long term capital gain and strong economic variables !