Last week's prediction by Capital Economics of a 20 per cent fall in house prices generated its fair share of shock horror headlines in the national newspapers. The truth, though, to be though that at the moment no one has a completely clear picture of which way house prices are heading. What is clear is that it is a subject of great importance to us all. Therefore, to get a clearer view, Siobhan Lismore has asked local housing experts for their response to Capital Economics' claim and give their predictions 2005.

John Wriglesworth, housing economist for property website Hometrack, said there was more chance of the earth stopping spinning than a housing market crash, as documented by John Loynes, chief UK economist at Capital Economics.

Mr Wriglesworth said: "It is true that house prices have reached the end of the recent boom period, which is why the Hometrack house price inflation forecast has been reduced to 0 per cent for 2005. But the economy at present is in no way similar to that of the early 1990s."

His view mirrored that of Rightmove commercial director Miles Shipside. He said: "While property prices are easing, there's no recipe for a crash."

Hometrack admits housing prices in London have fallen for the third month in a row, which indicates the market is slowing. In addition, its analysis shows houses taking longer to sell and buyers able to achieve higher discounts, as fewer houses are being sold at their original asking price.

The Nationwide Building Society agrees with Hometrack's forecast of low price growth in 2005, but points out that with the positive outlook for the economy and job market, the market can be expected to tread water, rather than experience a widespread slump in prices. Alex Bannister, Nationwide group economist, said: "Compared with a year ago prices are still up around 10 per cent.

"The asking prices, however, appear to be coming down, that is what we are getting from the estate agents."

This slowdown in prices has been dismissed by Halifax as part of the normal monthly fluctuations of the housing market, which can slow even when at its strongest.

But the bank does say there has been a lull because of the rises in interest rates.

Martin Ellis, chief economist at Halifax, said: "We continue to expect house price inflation to slow gradually over the remainder of 2004 and into next year as higher interest rates and the increasing difficulties faced by potential first-time buyers in entering the market curb housing demand."

According to The Royal Institution Of Chartered Surveyors (RICS), activity has not slowed gradually, but come to an abrupt halt on the back of the current rising cycle in interest rates.

This is echoed in the Council of Mortgage Lenders (CML) First Time Buyer Ability to Buy Index, which last May showed affordability to be at its worst for more than 10 years.

This has led the CML to predict strong activity in the buy-to-let market.

In September, director general Michael Coogan said: "This months figures seem to suggest that the slowdown recorded by estate agents and reflected in recent approval figures is beginning to make its way through the lending system."

Indeed, the Knight Frank Prime London Lettings Index shows the market continued to strengthen throughout August 2004, despite the seasonal lull in market activity.

The average rental values have remained fairly flat, but this has been put down to the core holiday period and is expected to resume.

A company spokesman said: "This process is likely to be enhanced by the impact of potential buyers seeking rental accommodation while waiting to see how conditions in the sales market develop."