Leading estate agent FPDSavills has issued a piece of research claiming that the biggest threat posed to the property market in the short term is not the shortfall in low-cost housing, nor the excessive levels of mortgage debt which are overstretching the finances of many borrowers, but the likelihood that the number of jobless is set to increase over the coming year.

FPDSavills research believes that this, coupled with "weaker economic growth and slower growth in household incomes" will have a negative impact on consumer confidence, which seems to be remarkably buoyant at present, and "act as a drag on house price growth during 2002."

Like the Nationwide Building Society, the UK Residential Research Bulletin reported average UK house price growth as 14 percent for 2001 and like most other observers, the predictions for this year are rather more conservative. The analysts at FPDSavills are predicting that average mainstream UK house prices will grow by just 5 percent in 2002, and by 7 per cent in 2003.

Unemployment is as a major short term threat to house prices, on the basis that a nine year trend for job growth now appears to have come to an end. Richard Donnell, head of residential research at FPDSavills said: "The small projected rise in unemployment will not lead to outright house price falls, which would require a far more fundamental weakening in the economic outlook than is anticipated for 2002. However, combined with other factors such as the weaker growth in household incomes, it will act as a drag on house price growth in the short term".

The much talked about affordability problem does get a mention in the report, but is only seen as a major problem in London and parts of the South East, where already stretched purchasing power is expected to weaken further over the next year or so.