It's the run up to Christmas and we're in a recession - well if not technically, we're definitely suffering from the recession - so don't be surprised to see redundancies on the rise and asking prices for homes on the decline. It is the nature of things.

And in this regard we have not been let down by the price data research from the property websites and . Both show the recent rally in asking prices reversing this month.

No doubt there will be many reading this as a sign of the start of the double dip in house prices. Well a double dip in the housing market is highly likely, but whether the drop in these indexes represents the crack from the starting gun or not is debateable.

For my money it is hard to unpick the seasonal effect from any underlying shift in the market. The picture is clearly confused still further with the promised rise in the stamp duty threshold.

Still it will be interesting to watch over the next three to four months the movements in these indexes along with the plethora of other measures of house prices activity.

It may just be that the decline in asking prices for homes measured in November continues and gathers a bit of pace through the winter.

That will certainly present an interesting conundrum for the housing market analysts as spring approaches as they seek to understand what will be the effect of a looming General Election.

The likelihood is a negative effect in terms of transactions.

But more specifically, will there be fewer homes put on the market, reducing supply, or fewer buyers in the market, reducing demand? Or both?

There is of course always the Armageddon option (looked at from the sellers' perspective) of a fall in prices in the lead up to an election spooking homeowners such as reluctant landlords into selling up.

My suspicion is that we will see little of what might be regarded as a resolution to the market and its current state of unstable equilibrium until after the General Election.

I fear we will continue to bumble along from many months yet with a housing market that is basically dysfunctional and confusing to read.

Topics