Many homeowners have watched in horror over the past year as their properties have plummeted in value – by 12.4 per cent on average, according to the Halifax. And most experts agree that – despite the Bank of England's 0.5 per cent cut to the base rate on Wednesday – the market still has further to fall.
However, while the floor might seem to have caved in, some homeowners could be in a position to ride the slump better than others. For example, if you live in an area that has witnessed sustained, as opposed to rocketing, house price growth, the likelihood is that the fall will be proportionate.
The Nationwide's third-quarter housing market report shows that the average price of a property in Durham, was actually 2 per cent higher than in the same period last year – the only positive movement anywhere in the UK. However, prices in the city have risen at a moderate 44 per cent in the past five years and 133 per cent in the past 10 years, leaving them at a current, sustainable level of £157,253.
By contrast, average prices in Belfast have fallen by 26 per over the past year, according to Nationwide, but this compares to rises of 75 per cent in the past five years and 201 per cent in the past 10. Properties are still priced at an arguably inflated £232,449.
"It's not uncommon for regions that have experienced sharp increases over recent years to now be seeing sharp falls," says Roy Beale, spokesman at Nationwide. "Northern Ireland is a clear example of where this has happened, with a meteoric rise now being followed by a steep correction, bringing prices back to the same level as they were in the third quarter of 2006."
Location can be the one big point of resistance to significant price falls. According to the Government's Land Registry, the number of property sales in August was down 55 per cent on the same month last year. But a closer look at the data also reveals that, despite the slump, certain pockets in the UK have held up well.
For example, a total 123 sales were completed in three postcodes in trendy Brighton and Hove in August, according to the figures. "That's an average of 41 sales in each postcode area, compared to the UK average of eight sales during the month," says Henry Pryor, a former estate agent and now director of the analysis website Housingexpert.com.
"Brighton and Hove has held up relatively well due to the mix of a strong local market, good amenities and a broad mix of homeowners. The area attracts first-time buyers as well as retired folk, who require less funding, and it has its own mini-economy that is less reliant on the City of London."
While commuter belts near busy cities have never been immune from slumps, historically they have been less affected, says Chris Cooke, a director at Daniels estate agents based in St Albans, a 20-minute train ride from the capital. Prices in the Hertfordshire city have fallen only 1 per cent over the past year, according to Nationwide, to a current average of £306,820.
However, even residents in these areas should not expect everything to be plain sailing, warns Mr Pryor: "Good property in good markets will sell at a price, whereas good properties in bad markets will just sell. Currently we are at this latter stage, but worse may be to come when even desirable homes won't sell."
The trigger for things getting worse, says Mr Cooke, would be substantial job losses. In the present economic climate, this looks like it will only be a matter of time.
House prices in London itself have undergone some stark falls during the past year – an average of 15 per cent, according to recent data compiled by estate agent haart.
However, the capital may be saved from hitting rock bottom because of the sustained and long-term demand for property. For example, haart also found that prices in London decreased by just 0.1 per cent on the month in September, shaving a negligible £253 from the average home, which now stands at £247,271.
"September started to show the first encouraging signs of green shoots," says haart managing director Russell Jervis. "Despite the collapse of Lehman and Bradford & Bingley, the level of registered buyers in London actually jumped 7 per cent the following week."
Miles Shipside, commercial director at the property website Rightmove.co.uk, points to another factor insulating some homes from a price crash: "Houses in areas of limited supply, such as coastal towns or conservation areas like the Cotswolds, are most likely to hold their value. In these places, it is a case of 'dead man's shoes' – people have to wait for a home to come up for sale."
It will also help if your property is within the catchment area of a high-performing state school. Research published last week by the Halifax revealed that for every 10 per cent improvement in a school's results (in terms of students gaining five or more GCSE passes with grades A* to C), the value of a property in the area will be boosted by around 3 per cent.
Mr Cooke at Daniels has experienced this phenomenon first hand in the past week, with St Albans schools hosting their open days for next year's intake. "As there are some excellent schools here and the selection system works mainly on proximity to the school gates, a home within, say, 500 yards is going to be sought after.
"Interest in a property is paramount to driving up the price. When a buyer knows they are the only one in the frame, they are more likely to play hardball with their offer."
The nature of the property itself will also play a part in how far its price dips relative to the market. "The type of home most hit by the slump will be middle-ground ones – perhaps two- or three-bed semis or larger executive, but identical, homes on estates," explains Mr Shipside. "One-off, more unusual-style homes, or listed properties, tend to fare better."
However, potential buyers of "desirable homes"will still need to sell their existing properties first, Mr Cooke points out. "In St Albans, for example, there is still a high demand for quality three- or four-bed family homes, priced in the region of £700,000.
"But while this still often leads to two or three people bidding on one home, a final sale relies on these bidders selling their own homes. And if they sell at a lower price than they had anticipated, they will want this hit to be translated into the cost of the home they are buying."