The property market freeze saw home buyers hit the lowest level in 27 years in 2011 despite record low mortgage rates on offer, Council of Mortgage Lenders show.

Mortgages for house purchases fell below even the level seen during the 2008 and 2009 property slump when house prices were falling at almost 20% annually.

There were just 700 more first-time buyers recorded than in 2008, but the CML said that monthly figures showed new buyers are starting to rush to take advantage of the stamp duty break below £250,000 before it ends in March.

RICS’ January report tried to find some silver lining to the dark property clouds.

It said that 12 per cent more members reported a rise in sales than fall in January, with some reporting a boost from first-time buyers trying to beat the March 25th stamp duty deadline. That contributed to 19 per cent more surveyors predicting a rise in sales than fall over the next three months.

However, 16 per cent more say house prices are falling than rising and the supply of property being put up for sale is outstripping demand from potential buyers.

Seven per cent more members recorded a rise in new instructions rather than a fall, while there was a seven per cent net decline on new buyer enquiries and 15 per cent more members forecast falling rather than rising prices over the next three months.

The longer-term forecasts

Economists the CEBR have predicted house prices will rise by 15 per cent over the next five years, as a shortage of homes counteracts economic gloom.

However, If house price did rise 15% over that period it would be an average of 2.8 per cent annually – a far slower rate than the 1980s to 2000s period.

How to move in 2012

If you want to move home in 2012, be prepared to be flexible on your own asking price and to do some serious negotiating work getting the seller of the home you hope to buy to act accordingly.

And don’t forget, estate agents don’t get paid for homes that don’t sell, so make them work hard for you when either buying or selling.

Painting a far more dismal picture is economist and investment manager David Kauders has suggested that this is actually the start of ‘a slow-motion crash – so slow that many commentators will not even see it. They will observe only the shorter-term trends.’

His prediction centres on his analysis that claims the substantial house price rises seen since the 1970s have reflected an exceptional period of time when mortgage credit expanded.

That has now come to an end, Kauders suggests, and a slow Japan-style crash will now occur over the coming decades with short rallies punctuating a gradual decline in property prices.

Buyers vs sellers: the great stand-off

Estate agents still report a stand-off between sellers and buyers, with the former reluctant to cut prices and the latter unwilling to pay over the odds.

Home sellers must either have a desirable property to sell in an in-demand area or be willing to lower their expectations, if they want to get a sold sign up outside their house.

But the real mark of this housing slump is not the statistics based on mortgage approval figures (Halifax and Nationwide) or even sold prices (Land Registry and others), it is what’s happening to the homes that aren’t selling.

With buyers seriously limited, properties that don’t tick all the right boxes are sitting on the shelves unless sellers are willing to cut the price, and with low rates keeping forced sellers to a minimum many are just sitting unsold.

Expert views: What next for house prices?

• CEBR forecast prices rising from 2011 to 2016 by 15%
• Rightmove says asking prices will rise 2 per cent in 2012
• Howard Archer, chief UK economist at analysts IHS Global Insight, suggests prices will be 10 per cent lower than their mid 2010 levels by the end of 2011
• RICS forecasts a 3 per cent fall in house prices in 2012, but says property will not dip by more than 5 per cent
• Nationwide predict prices to be flat in 2012
• Halifax predicts a 2 per cent decline to 2 per cent rise in 2012
• Hometrack forecasts a 3 per cent decline in 2012

The headwinds facing the market

The big potential stumbling blocks for the property market.

• Interest-only mortgage crackdown
• Lenders face a mortgage crunch
• Austerity measures and the Eurozone crisis

Lenders have made it much tougher to take out cheap interest-only loans, which have helped prop up the property market. This is a reduction in credit and will exert downward pressure on prices.

The second problem is that lenders are still cash-strapped and the Eurozone debt crisis is weighing heavily on the banking sector – it may have contributed to a dramatic fall in swap rate money market costs and the fixed rate mortgages that these heavily influence, but if things get worse banks will find their balance sheets hammered.

Government cuts will also start to filter through soon, as the UK tries to balance the books. That will mean public sector job losses, higher taxes and a dip in confidence.

The cost of moving is also sky-high. Those buying family homes in areas where a relatively modest property of this kind costs more than £250,000 face a stamp duty bill of at least £7,500, add estate agent and solicitors’ fees and moving can set a normal family back £15,000 or more, without even having to find the extra cash for a 25% deposit on a more expensive home.

• -Consist of 18 self contained flats – 10 x 1 bed, 8 x 2 bed

• -Gross internal area (excluding common parts) – 10,843 sqft

• -17 are let and 1 is currently vacant

• -Total rent currently = £398,425 pa

• -Fully renovated in 2012

.• -Yield – 4.8%

Developed in 2008 – 100% occupied since

All bed spaces are en-suite and are within 20 self contained flats

High spec and contemporary finish

Adjacent to Sheffield Uni’s North Campus

Management company in place for next 3 years

Seeking offers in excess of – £4M

Yield – 6.45%