House prices are predicted to fall another 20% by the end of 2012, according to some experts. They are blaming future unemployment and government spending cuts on the downturn in the already struggling market. A rise in interest rates over the coming months will only add to the challenging times the UK economy is already facing.

Economists are looking at the big picture and seeing a possible double-dip recession occurring, even though demand for current available real estate will more than likely pick up. The chance for a double-dip looms heavier when considering inflation hit a rate of 3.7% by the end of last year and has yet to come down. The coming rise in interest rates will not only keep spending in check, but will also hurt property prices.

Paul Diggle, with Capital Economics, discussed the correcting period for the economy and described where the current market stood, saying: "Prices are trending slowly downwards at the moment, but our view is that this is really the start of the second leg of the correction, and we expect prices to fall significantly further."

Andrew Brigden, with Fathom financial research group, believes homeowners are in for a bumpy ride during the next 24 months. He believes home prices are 20 to 30% overvalued based on where wages currently sit. He commented on the state of housing, saying: "I think the correction will come at some point, even if interest rates stay where they are, but if rates go up, that will hasten it."

The housing market has lost almost 20% thus far, since the last quarter of 2008