Leonard Svenssen, magaing director of City Bank says “We are experiencing a drop off in house prices due to the global credit squeeze and the fact that interest rates have really started to bite”.

Arnold Harris of Moving Home says “The National Estate Agents Association is reporting that 90% of their registered agents are reporting falling house prices in London and in fact sellers are being urged to drop their asking prices by a minimum of 10% but still it isn’t enough to tempt buyers back to the market to buy”.

Some experts are saying that the London housing market has already fallen by at least 15 – 17% and that the capital will not see any improvement until at least the Spring of 2009.

“The global credit crunch has become a bit of a cliché” says Ron Alerman, chief economist at homesforyou – “the truth is, is that there has been a massive crash in global funds due to the enormous number of defaults in the US – the UK however, is not far behind.

According to the International Monetary Fund Britain's housing market faces a devastating slump.

In its twice-yearly report on the state of the global economy this week, the IMF warned property prices are overvalued by as much as 40 per cent.

Repossessions have been rising this year and are likely to rocket as people with poor credit ratings and little equity in their homes are refused a new mortgage when their current fixed rate finishes.

The fallout from the credit crunch and the problems at Northern Rock recently will also have hit consumer confidence.

It can't be sustainable for double-digit house-price inflation to continue but the fundamental points above should maintain stability.

Rather than there being widespread falls in house prices, I would expect to see a levelling off rather than a crash.

Nonetheless, it makes sense to review your mortgage to ensure that you are not paying any more than necessary and that you don't suffer heavy payment shock if you're about to come to the end of an existing deal.

It makes sense to pay down debt if possible, concentrating on the most expensive first.

Robin Amlot, senior editor of moneyextra.com: "I expect prices to come to a standstill - which will feel like a crash because we're used to them going up each year."

Fionnuala Earley, chief economist at Nationwide Building Society: "We expect house-price growth to slow but there are still some supportive factors, such as a stable labour market and the fact we are not building enough houses."

Bbc economics editor Evan Davis: "Experience tells us there might be but I think it's most likely prices will stagnate for quite some time."

Simon Rubinsohn, chief economist with the Royal Institution Of Chartered Surveyors: "A lack of homes for sale and buy-to-let demand continues to support prices and prevent the crash that some commentators are predicting."

Martin Ellis, chief economist with the Halifax: "We're going to see a slowdown in house-price growth. They will rise more slowly than in recent years but we expect prices to continue to increase."

Demand is likely to fall and house prices may stall through 2008, warns Ernst & Young in its latest Item Club forecast, due to be published tomorrow. But the accountancy firm is more optimistic than many about the UK housing market's prospects. With the labour market strong, it thinks "it is unlikely that there will be a major housing recession".