The housing market boom has finally run out of momentum, and fears are being voiced in some quarters that our biggest financial assets could go into reverse in 2008.
The financial trepidation with which we are tiptoeing into the new year is almost tangible. Few doubt 2008 is going to be a year of uncertainty, if not living on the edge, and this is especially true in the housing market. So what do those in the know say is going to happen to property prices, and how will it affect you?
Unusually for the housing market, most industry insiders are united in their predictions sombre but not doom-laden. Martin Ellis, chief economist at the Halifax, the UK's biggest mortgage lender, expects the sector to begin in the new year as it ended 2008 in a sluggish state. "House price growth will be flat during 2008, underpinned by the continuing shortage of supply of housing. We expect the Bank of England to cut the base rate at least twice in 2008 to 5 per cent or below."
Likewise, Nationwide building society's chief economist, Fionnuala Earley, expects that prices will be stagnant in 2008, predicting 0 per cent growth.
This, she adds, may not be a bad thing. "From a longer-term perspective, a year of flat house prices will contribute more to the future stability of the market than a year of 10 per cent inflation and ever worse affordability. Now may well be a good time for growth to pause for breath."
The Royal Institution of Chartered Surveyors (Rics) also expects that property prices will be broadly unchanged next year and acknowledges that there could be problems for some people in the short term. Rics' chief economist, Simon Rubinsohn, says: "2008 will prove a difficult year, but with falls likely in the base rate, the housing market should be provided with a stable platform. The effect of the credit crunch will dissipate slowly, meaning that those seeking to obtain finance in the first half of 2008 may struggle."
But there are those who, rather than seeing the bright side, predict the toughest year for the property market since the crash of the early 1990s. "UK house prices have finally become unaffordable," says Diana Choyleva, head of Lombard Street Research's UK service. "The credit crunch means banks will be increasingly unlikely to lend."
She adds: "With the waning demand for mortgage credit and the waning lending availability, I expect prices to fall throughout next year by around 3 to 4 per cent."
Of course, even if house prices do end 2008 at or around the same level as they began it, this will represent a real-terms decrease as inflation is forecast to rise by around 2 per cent.
What's more, some parts of the country will fare worse than others. In Northern Ireland, for example, there has been a rapid rise in prices in the past two years, fuelled by the peace dividend and speculator interest from the Republic. That started to fall back in the final quarter of 2007 and most analysts expect this to continue, at least in the first few months of 2008.
Property website Rightmove strikes a more upbeat note: "Prices will rise where demand continues to outstrip supply in quality areas close to major conurbations especially London," says a spokesman.
But all in all, whichever part of the UK they live in, sellers are going to have to work hard to attract buyers because demand is dwindling. Members of RICS, for example, report that the number of new buyers has dipped to lows not seen since the most recent market boom started at the end of the 1990s.
Meanwhile, consider other ways of boosting the value of your property perhaps an extension such as a loft conversion, or an upgrade to the kitchen.
Ultimately, though, after a number of years during which sellers have ruled the market, we may now have to accept we will get less for our homes. The consolation, says, Rightmove is that: "Whatever reduction you have to make, you should be able to find a seller who is willing to take just as much money off the property you wish to buy."