Four experts share their predictions for house prices, interest rates, the mortgage market and the wider economy for 2012.
Gary Styles, strategy, risk and economics director at Hometrack:
"We expect a modest recovery in 2012 and for this to be accompanied by a prolonged period of stable interest rates and modest house price declines. Recent events will make it even more likely that interest rates will stay lower for longer and if anything the Bank of England may consider a modest easing to 0.25 per cent during the course of 2012.
"Only a return to stronger UK economic growth and a more robust outlook for real incomes would allow a more upbeat assessment for the housing market."
Robert Gardner, chief economist at Nationwide Building Society:
"The outlook for house prices remains uncertain, but with the UK economic recovery expected to remain sluggish in 2012, house price growth is also likely to remain soft with prices moving sideways or drifting modestly lower.
"The ultra low interest rate environment that has helped to provide support for the housing market is likely to persist through 2012. The Bank of England will need to be convinced that the UK recovery is gaining momentum before it starts to contemplate raising interest rates. This is not likely to happen until 2013.
Ray Boulger, senior technical manager at John Charcol:
"We don't expect house prices to do too much in 2012, but I think the fact that 35 to 40 per cent of homeowners are mortgage prisoners -buyers who are reliant on low rates and unable to move - the levels of transactions in the housing market are not going to change very much.
"Some of the factors that have driven house prices at the top end of the market this year are going to continue. For people in the threatened eurozone countries wanting to get their capital out of the country, the top-end London property market is one of the relatively few places they can buy real assets in a politically stable environment.
"We think the Bank Base Rate will stay at 0.5 per cent at least until the end of 2013 and quite possibly into 2014."
Martin Ellis, housing economist at Halifax:
"Weak economic recovery and considerable pressures on householders' finances have constrained housing demand. Low interest rates, however, have helped to support the market. Largely as a result of low rates, typical mortgage payments for a new borrowes have fallen from a peak of 48% of average disposable earnings in mid-2007 to 26% in 2011 in the third quarter.
"This is significantly below the average of 37% over the past 25 years and is at its lowest since 1997.
"The prospect of exceptionally low official interest rates over the foreseeable future is likely to continue to support the market next year in the face of a very difficult economic climate.
"Overall, we expect continuing broad stability in house prices nationally during the course of 2012 with prices ending the year at levels close to where they begin."