In November 2007 there were 27,000 new mortgage approvals, that’s 76% down on new approvals at the top of the housing market in mid 2007.

The amount borrowed has also significantly reduced, not by 76%, but by 90% from November 2007 to November 2008.

First time buyers are struggling to get a mortgage without a 15% deposit and even then, minor blemishes on their credit records can be a deal killer.

Unemployment and job uncertainty are rising both of which further depress prices.

People exiting adverse credit deals can’t find a lender so are stuck on their existing lenders Standard Variable Rate (SVR) or Libor (not a bad thing in the current low interest rate environment).

Buy to Let properties are being dumped onto the market by now reluctant landlords/investors, as are repossessions which are at an all time high.

Those that are able to purchase are negotiating significant discounts from current valuations based on the assumption that property prices have further to fall.

In short, there is no good news to prop up property prices.

The average price to average earnings ratio has fallen from a peak of 6 x in mid 2007 to 4.4 x now, close to the long term average of 4x. This means that there is a glut of first time buyers who want to get their foot on the property ladder as they see valuations that make their first home affordable. The majority though can’t find a 15% deposit. Those that can are still reluctant to buy, given the probability of another 15% fall in property prices in 2009.

My prediction is exactly that, a further 15% fall this year, followed by a further 7% in 2010. I’m guessing on a low point mid 2010 and house price stagnation for a further year after that.