To date, the property market downturn has been the most palpable effect of the recession for the majority of households. There will be no respite in the new year, with rising unemployment causing more homeowners to fall into arrears. The numbers behind with their repayments may rise from 210,000 to 500,000, according to the Council of Mortgage Lenders.

This was a downbeat forecast, but then every forecast for the housing market in 2009 is downbeat — perhaps because a year ago even the gloomiest commentator did not envisage the depth of the slump and now wants to err on the side of caution. Some such as Halifax and Nationwide have decided not to make a forecast.

The prime cause of plummeting prices has been the shortage of mortgage finance. The Government is under increasing pressure to guarantee mortgage lending by the banks in 2009, but even this may not incline the banks to splash the cash around.

Homeowners who overextended themselves to buy at the market’s height will be in an especially despondent state in the months ahead. Some will be struggling to stave off repossession — a fate to which as many as 75,000 of them could succumb in 2009 — and all will be dispirited by forecasts that values are set to subside further. This is despite an average price fall of some 15 per cent this year. Knight Frank and other commentators calculate that prices at the bottom of the market may be 30 per cent off their peak in 2007.

Michael Saunders of Citigroup has pointed out that such an outcome would leave between 2.5 million and 3 million homeowners in negative equity and longing for a recovery, which is now expected to start in late 2010 or early 2011 in London and the South East. But recovery could take its time to arrive elsewere. In Northern Ireland, prices may not return to their heady level of 2007 until 2018.

The direction of the market will depend on mortgage supply. The base rate is down from 5.5 per cent to 2 per cent; Libor, the inter-bank rate that determines the cost of home loans has edged lower and the banks have benefited from billions in taxpayer subsidy. And yet the cost of the best mortgage deals is higher than a year ago.

Homeowners who still have considerable equity in their properties can be relatively sanguine about the housing market’s weakness.

For them, 2009 will be another year of staying put. For the more adventurous among this group, lower prices will be an opportunity to snap up, say, a second home in the South West, where values are 12.7 per cent down this year.

Whatever location these buyers opt for, they will be eager to move before it is generally acknowledged that a recovery has set in. Like other estate agents, Kinleigh Folkard & Hayward reports a surge in viewings in the past few weeks.

Would-be buyers who have been waiting in rented accommodation are sizing up what’s on offer, proposing to pounce in January. As Dominic Agace of Winkworth, the estate agents, points out: “Property at a discount of 20 to 25 per cent starts to look attractive.”

Some buyers have been elbowing their way into already packed auctions in search of repossession bargains which can come with a tax break. Homes up to £175,000 remain stamp duty-free until March.

Mortgage lenders, which are obliged to obtain the best possible price for homes they have seized, are moving faster than before to dispose of them. The number of residential lots sold at auction in November was up 40 per cent over a year, according to David Sandeman of Essential Information Group, the auction data specialist.

The Government’s mortgage rescue scheme designed to keep more struggling borrowers in their homes is limited in its scope, so there will be many more knockdown repo buys in 2009.