But hopefully by the middle of the year the steep decline that the property sector is currently experiencing will begin to slow and by 2010 the rate of decline is expected to be between 1 and 3%, the report from Jones Lang LaSalle, says.
Analysts predict that there will be no bottoming out of the market until the fourth quarter of 2010 and a price recovery isn't expected until after 2013.
It will take around eight and half years for property prices to recover to peak levels of 2007, they also say.
In what is a pretty gloomy prediction the report says; 'The UK is very much part of the global economic slowdown and is expected by some to be one of the hardest hit nations The UK housing market is now in a poor state.'
And it is London that is going to feel the effects in terms of property prices. Prime central London prices are predicted to fall by 16 to 20% next year and in Greater London falls of 15 to 17% are predicted, higher than the national average.
The consultants expect the UK to stay in recession throughout 2009 and the extra spending from the Government to support the economy could result in a longer period of recovery, especially if taxes are increased.
But it is London that is expected to lead the property market recovery when it comes and this is likely to be boosted by the run up to the 2012 Olympic Games. 'We believe that house price growth in Greater London will be 7 to 9% in 2011 and higher still at 8 to 10% in prime central London. These compare with projections of 4 to 6% in the UK as a whole.
'We also believe house price growth in London will be stronger than in the UK in 2012 although the differential is likely to be far smaller,' it continues.
'We still strongly believe that the medium to long term outlook for UK house prices is very positive. Not least of the reasons behind our conviction is that the much publicised gap between demand, the number of households, and supply is not only already significant but that this divide will undoubtedly widen over the next few years,' it concludes.
'This leads us to believe that the prospect for a return to 20% plus per annum house price growth at some stage over the next 10 years is highly likely.'
