Open University Business School economist Martin Upton says the forecast for the housing market next year is one of "bright intervals and scattered showers" rather than "storm clouds".

“Like the weather and David Beckham," says Martin, "the subject of house prices is never far from the lips of the public. And the worry now is about what some see as the storm clouds over house prices and fears of a repeat of their collapse in the early 1990s."

But the (now) academic with 17 years of housing industry experience behind him says that although house price indexes, mortgage repossession figures and industry reports reveal that the market is weakening, an all-out collapse is still unlikely.

Unemployment remains low at 4.6%, points out Martin - half the level it was between 1990 and 1992 - the last period of significant house price deflation.

Meanwhile, real incomes are continuing to rise despite a slowdown in economic activity, supporting the capacity of families to meet mortgage payments. Despite the hikes in UK interest rates, mortgages remain affordable, while mortgage arrears remain low.

The rate of house construction currently falls short of the demand arising from demographic change - including the growth in the divorce rate and the related break-up of households.

Recent initiatives to increase housing supply, including the plans for new developments in Essex, Cambridgeshire and Northamptonshire, are years away from having even a scintilla of an impact on this shortage.

"An end to rampant house price inflation is not a precursor to a collapse in house prices, because this would fly in the face of current economic realities," says Martin, "2005 will see falls in prices in some months and rises in others – with the latter concentrated in the second half of the year. Over the year as a whole, prices will remain largely unchanged."