The reason is that the aspirations of buyers and sellers may be changed as never before by this slump. One group identified by Dr Christine Whitehead, an economist at the London School of Economics, comprises those nurturing a desire to sell and move to cheaper properties; they lurk as a hidden force in the marketplace. Dr Whitehead believes these people may constitute a pent-up supply which could far outstrip the pent-up demand conventionally expected to provide the energy to fuel recovery.
'There are all these people who would have sold if they could, as well as those who would buy. And it isn't clear which will be the bigger factor when the market starts to move,' she says. 'But many who have been hurt by the recession would like to trade downmarket rather than upmarket as they have traditionally done.'
Furthermore, people contemplating buying for the first time may decide that they have sat out the slump for long enough. When they do come into the market, they could find themselves chasing exactly the same kinds of properties as those who are trying to move downmarket. 'We could have a situation where there is a potential squeeze on properties in the lower price brackets, with nothing much happening on the upper levels - the second- and third-time buyer price ranges.'
It is hard to imagine there being a great rush for the ubiquitous three-bedroom semi that makes up the bulk of the lower end of the market, but there is logic in Dr Whitehead's argument - especially since a possible two million homeowners struggle with the misery of owning homes no longer equal to the value of their mortgages. The prediction that aspirations will change in this way seems quite likely to come true.
So what happens to all those stuck in the negative equity trap? Unfashionable though it is to see higher inflation as desirable, there is no doubt that it would bring quicker relief to those who have lost the most. With inflation at current levels of around 4 per cent a year, Dr Whitehead notes that it could take at least six years for them to recover the lost value in their homes - assuming, of course, they have met their mortgage repayments in the meantime.
John Wriglesworth, an economist at UBS Phillips & Drew, explains in his report Housing Market: More Pain Before Gain that the problem of negative equity is particularly significant because it has hit first-time buyers more than anyone else: it is they who rushed into buying to beat the abolition of joint mortgage tax relief in the summer of 1988, when prices were at their peak. Their plight is putting off many potential first-time buyers; this group of purchasers has decreased by 40 per cent in recent years. Ironically, though, many experts look to them to set the market moving again.
Wriglesworth identifies another group of buyers whose ideas about home ownership are dramatically changing. The young, he believes, no longer necessarily want to buy as soon as they can; it is hard for them to raise the 5-10 per cent deposit now required by most building societies, and renting is comparatively hassle-free. A recent Woolwich MORI survey of 1,000 18 to 25-year-olds showed that 80 per cent wanted to buy a home some time in the future, but only 25 per cent wanted to do so within two years.
So the young are not in a hurry. As a result, the properties that have been tailor-made for them - studio flats - have become almost redundant in the marketplace. For when the young do eventually buy, they skip the first rung and go straight for the three-bedroom semis. There are certainly enough studio flats washing around unsold to confirm this suspicion.
All this means that the market will have to depend a great deal more on 'baby-power' for its recovery. Wriglesworth says it is now down to the vast numbers of 28-year-old women (this being the average age at which most women now have children) to produce the goods. For, Wriglesworth says, it is only when couples decide to have families that they swap the flexibility of renting for the commitment of home ownership.
Luckily, 2.4m babies are expected between 1992 and 1994; then again, about the same number arrived between 1989 and 1991, and didn't work a spell on the housing market. Perhaps it was rising unemployment - which sent shivers through every section of the market - that damaged confidence enough to counteract the magic.
At the moment, there are around 1m housing transactions each year (to put the current slump in perspective, there were 2.1m transactions in 1988). Even if that figure stays the same in 1993, says John Wriglesworth, house price falls are expected to be similar to those experienced in 1992. And if transactions were to increase by 15 per cent, there would still be a 5 per cent drop in prices. Wriglesworth believes that the number of sales would have to increase by 30 per cent before the backlog of around 230,000 unsold properties would be mopped up and prices start to stabilise.
So the year ahead looks gloomy, though many experts predict it will pave the way to a better 1994. But there are even fears attached to the idea of recovery, which could widen the trade deficit and force another change in economic policy. The Government would do anything in its power to prevent a house price 'boomlet', and the raising and lowering of interest rates is one of its favourite tools. So housebuyers thinking of moving while mortgage rates are low, might think twice in case rates rise again.
This month, building societies and estate agents are talking about this being the worst of times for house prices since records began - and the worst for the volume of sales since 1974. On the other hand, it is the best of times for mortgage rates - which, as a percentage of income, are at their lowest level for over 20 years.
In the upper reaches of the market, where estate agents struggle to sell expensive country houses and smart central London flats, Hamptons reports a suddenly noticeable interest from off-shore buyers. They come only in small numbers, from the US, Hong Kong, Germany, Italy and Russia, but they have come none the less, attracted by the post-ERM cheapness of the pound.
'Looking at the end of previous slumps, the cash has tended to come into London from abroad before breaking out into the country,' said Colin MacKenzie, director of Hamptons country house department. 'Nevertheless, I have to say that we are planning for no change in the year ahead.' In terms of sales, he detects another aspirational change, away from the stockbroker-rich counties of Surrey, Berkshire and Hertfordshire and towards the more rural counties of Dorset and Wiltshire.
This must also be the belief of W H Smith, which will start selling In The Sticks - a guide to the sales of remote rural retreats and ruins - from April onwards. Jeremy Higgs, who produces this magazine from an isolated house in the Pennines, says: 'We have previously sold by subscription only, mostly to Londoners and town-dwelling professionals. Some of them have radically changed their lives as a result, moving from one end of the country to the other, from a town-house to a cow-byre or a barn.' I feel a life-change coming on already.-Reuse content