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 The Bank of England has warned that homeowners are still vulnerable to problems created by US credit crisis.
Worst hit are expected to be first-time buyers, buy-to-let investors, and Britain's sub-prime borrowers as the credit crunch could still cause a crash in the commercial markets.
According to the Bank's Financial Stability Report, there is a "tail of vulnerable UK households" who will struggle as banks make it harder for people to borrow money.
"This tail includes 'adverse credit' households, recent first-time buyers and some buy-to-let investors" where "buy-to-let yields continue to be squeezed, with rental growth remaining weak and net rental yields remain negative," it added.
Recent investors are relying on continued house price appreciation to earn positive returns."
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Julian King of National Homebuyers comments, "Homeowners are hanging onto the last thread. Many are arranging a quick sale now to maximise the equity in their home.
"Our analysts have predicted continued price falls in the first quarter of 2008, as the number of properties on the market increases, while the number of buyers remains limited".
Mr King is a fast property sale expert at National Homebuyers, the UK's leading quick house sale company. The company guarantees to make a cash offer to purchase any property from vendors who want a quick sale.
Earlier this week, Kate Barker, of the Bank's Monetary Policy Committee said that people's expectation that house prices would continue to grow was due for a "major change".
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