When discussing house prices, there is never a shortage of data. The unusual thing about recent months though is that the normally conflicting house price surveys are almost unanimously downbeat. In a recent article for The Observer on Sunday, journalist Katie Allen looked at the behaviour of the housing market and assessed how it is likely to react to the latest wave of financial calamities hitting Europe.

It would seem that many buyers are scared off of selling by high mortgage application fees and stamp duty as well as the bleak economic backdrop, and instead choose to stay put and renovate. Prices are now down 19.3% from the high in the summer of 2007, using the Halifax measure, and most experts agree that the worst is not yet behind us. However, to get an idea of where prices are really going, we have to look back much further than recent years or even decades, says Neil Monnery, author of Safe as Houses?, a history of property prices. His research suggests the UK market has further to fall.

"House prices, when viewed over a long period, tend to rise at 1% above inflation. In the UK in the last 15 years they have risen 5% per annum in real terms … At some point, prices in the UK have to revert back to trend. But there are different ways of going there." He does not see a US or Irish-style crash, however, but – thanks to low interest rates – something more akin to the pattern in Japan where prices have fallen every year for 20 years.

The silver lining to all this is first time buyers – with prices being adjusted, whole generations of people for whom property ownership has previously been off the cards should be able to buy their own homes for the first time.