The Nationwide building society has issued some more unfortunate news regarding the housing market. Prices dropped again last month by another 0.9 per cent. This is the third month in a row for a drop, resulting in the average price of a home dipping to 166,507 pounds. The Nationwide is using the term "stagnate" to describe what prices have done over the summer, with no relief in sight.

Howard Archer, chief UK and European economist with IHS Global Insight, estimated house prices will lose another 3 to 5 per cent in value over the last six months of the year. He also has predicted further losses in value as the economic conditions remain the same or even worsen. He commented on the future, saying: "It is hard at this stage to be optimistic about house prices in 2011 as the fiscal squeeze will increasingly kick in, which will hit people’s pockets and lead to serious job losses in the public sector. Consequently, a further drop of around 5% in house prices looks highly possible in 2011, and the drop could well be steeper still.

"Much will depend on mortgage availability and the amount of houses coming onto the market as well as how well the economy holds up. Therefore, we suspect that house prices will be at least 10% lower by end-2011 compared to their mid-2010 levels."

Bill Cullens, chief at Clyde Properties, also remarked that the price drop was expected, saying: "We had an unjustified surge at the early part of this year. I believe it was partly down to the run up to the General Election, when there was nothing but good news spoken by all the major politicians, all of whom gave the impression that the country was coming out of the recession and we rescued the banks," he said.

"All you are seeing now is the reality check. There is more property coming onto the market and people are quite rightly selling before they buy.

"Most of the people I am dealing with accept that house prices have fallen and that they are not going to increase. People have become less bullish when it comes to property."

With more unemployment coming with further public sector job cuts, uncertainty about the future has never been more prevalent throughout the UK.