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Your looking at two possible scenarios - the start of a dead market, as far to many people will have their money tied up in properties that can only offer vast negative equity and refuse to sell. Who can buy what isn't for sale?
Or you have a situation of large repossessions due to recession and usually unemployment, but if the Governments ownership of the banks (or OUR ownership as tax payers) means that the customer is protected from such action (as Brown and Darling promised) then your first outcome is more likely.

- Gaz, London

You can only say that they are at "bargain levels" if they drop another 50% -- which is starting to look quite likely.

- Phil Jones, London UK

If all you optimistic fools think that I'm going to sell my house after investing some £45k plus renovating it, then you really are stupid. It's complete self interest on your own parts, hoping to "bag" a bargain cheap. Think again we're not all in rich houses and no I'm not selling for less than cost. Not all of us are the rich that you think the market consists of.

- Peter, sutton

Long may it continue.

- V.Devers, West London

Come on cheer up London, we've been through worse times. We'll pull through together in time for the Olimpics hopefully I love my 'home'...long term investment which is still far better than renting. Home is where the heart is..home sweet home.

- Miles, Wapping, London

This is utterly irresponsible drivel - the very worst kind of vested interest pumping worhty of some clown like Phil & Krusty. Houses are not at bargain levels - they are at 2006-2007 levels - and they were unaffordable. Please stop giving a forum to economic heavyweight from the estate Agencies. A 2-bed in Belsize Park for just a touch under #700K - hold me back! Let the crash continue - the sooner we get to the bottom, the better for all of us.

- Paul C, Harrogate, North Yorks

Shall I go and take out a liar loan then?!? I mean - how else am I - or anone else fot that matter - going to "afford" to buy even a dog kennel?

- Paul Egde, Chichester Sussex

I love the way the article describes the mentioned flat as the bottom end of the market. 500K for a 2 bed flat is described as bottom end of the market? Who are they trying to kid? I mean who buys these sorts of properties anyways? Bankers? Lawyers? Rich Kids?

- Anon, SW16

Prices will come down a little but people still need homes for the long term, all those that think prices will fall by 40% in london are just hoping they do.
In inflated areas such as Holland park, Notting hill, Chelsea, Hampstead, you maybe be correct, but in cheaper areas where family's nest in homes for the long-term i doubt they will fall to much as they were cheap in the first place, remember house builders will have stopped building new homes, london as a whole has to many people to house its population.
If you want to buy a home then buy when you can afford it, not because you think it will go up or down in value.

- Paul, London

Fundamentals are strong and now is the time to pick up a bargain. Lets not get over carried away by all the doom and gloom news.

- Gaurav, London

A "bargain" in London mearly means paying through the nose rather than being robbed blind for some pokey flat or nondescript terrace house worth at most a quarter of the asking price anywhere else.

- Steve, Hereford

"Window of Opportunity"?? Is this some sort of a joke? Notting Hill without those swathes of City bonuses to prop it up can only fall more....this window is going to be open for so long, that its rusty hinges will need replacing before it ever gets closed.

- Ara, London, UK

Advise please please. I am desperate to move but I wonder if I will be in negative equity with my own house. Should I stay or should I go?

- Lily, ilford, United kingdom

Its supply and demand vs affordability. Areas with high levels of buy to let will be hit quite hard. Genuine home owners won't sell because they can still afford their mortgages and they need to live somewhere... For the man on the street, lending will get cheaper as the Bank of England enforces its policies on the likes of HBOS, Lloyds and RBS - and that includes fist time buyers.

The tipping point is when renting looks like a waste of cash compared to a mortgage - that tipping point is sooner than everyone thinks, because most people want to own their own home.

There is an oversupply of new flats which is preventing existing flat owners from selling and moving up the ladder. That too may take some time to correct itself.

The flat-builders will stop building more concrete boxes soon - and that will be the best thing for everybody.

- Steve, Shenfield

Rents are getting cheaper in London - why buy?

In the development I live in, we have 73 flats advertised on one website. There were 63 in July this years.

The advertised prices are coming down to 2001 levels already and Landlords are so desperate they are putting flyers through our doors offering discounts.

This is in a desirable newish block in central London with parking.

It's hard to call the bottom of the house price crash but anyone buying now is a fool.

The website listings for properties for sale is getting bigger each day. I have had searches saved for months and the numbers are increasing.

Nothing is selling. They're still be there in a year until they get added to the renting section (and further bring down the prices).

I'm not after the same type of home as a millionaire so it's of no concern who many ultra-rich people there are in London. They have a whole world to chose from and will recognise that like in Japan, the market here could be stagnant for a decade.

Attempts to talk up the market by the ES are pointless. You didn't know what was happening a year ago - why would you assume we trust you now?

- Flopsy, London central

To Peter of Romford.
We're just about to enter recession and repossessions are rising. Prices will inevitably be lower in 12 months time. You should also remember that every seller who doesn't put their property on the market means one less buyer as well, so no change in the buyer/seller balance there.

- Ian, London

To Peter in Romford: you are right, people are not putting houses on the market at the moment; but when redundancies kick in, remortgages become harder and the cost of living soars through higher food and utility costs plus the increased tax burden of Gordon's bank bailout, many people will have no choice but to sell.

- Austin, London

Peter of Romford highlights the ignorance of so many in this country who are in complete denial over the severity of the current house price crash.

Taking your property off the market does no make it immune from price falls. There will be forced sellers who will have to take low offers and it is they who set the market price, not those who prefer to stick their fingers in their ears and whistle as if nothing's happening.

- Cp, London, UK

If the FTSE can drop to 1996-7 levels, why shouldn't properties follow suit, which was then at its most affordable ratios in 15 years? Earnings have increased 40% in that time, so we won't be seeing 30 grand ex council flats in Hackney, but who's to say that 60-70 isn't impossible or unreasonable?
Forget the "asylum seeker in a mansion" scare story, immigrants are going home in droves, thanks to the exchange rate and the job opportunities, so it's a problem that's easing considerably.

- Ned, Highbury

Neil of Brighton is right when he claims that he needs to earn &170,000 per annum to buy a house in Belsize Park.

Mrs Saiedi,of Ealing receives £170,000 in benefits so that she can live in a £1,200,000 house courtesy of us, the British Taxpayers.

The lesson is that we should not attempt to earn the income to afford this life style when it can be claimed in benefits.

Poor fool that I am, I have been a wage earner and a tax payer for the last 42 years and I have never earned even half that figure. However at least I have my self respect intact when I say that I have paid my way in society.

- Martin Fielding, London, England

With rental yields (London portfolio is bringing in around 7%) increasing due to buyers renting rather than buying its a great time to bag a long term bargain.
Given the recent interest rate reductions and potentially more to come the buy to let market continues to out perform stocks, bonds and high income interest savings accounts. My advice take the asking price down a further 10%+ when negotiating to secure a good deal and then enjoy either renting/living

- Kevin Gibson, London, UK

As Donald Rumsfeld said: "There are things we know we know. We also know there are known unknowns. That is to say,we know there are some things we do not know. But there are also unknown unknowns - the ones we don't know we don't know." Anyone who thinks they can call the bottom of the housing market is dreaming. If you are able to buy now - do it. Unless you sell within six months, your investment is safe. And if you need to live in the house for 25 years who cares what today's price is. Inflation will make any drop in price negligent. I bought my first flat in 1980 for £18,750. So what if I overpaid/underpaid £2,000 for it!

- Ian, London

Prices still have a long way to go yet. Estate agents trying to talk up the market is an obvious ploy as they try to save their own jobs. Anyone buying at the momement should really think carefully. Wait a few months more yet.

- Neil, Luton UK

"Now is their best time to close a deal " - what a load of cobblers ! It may be the best time to close a deal for an estate agent. But my view is this headline should be :
April 08 - £635K; October 08 - £499K ; April 09 - £350K.
SO WAIT.

- Alan King, London

I think this article is still in the world of nod. Londoners have now got to get out of this world of house price madness.
A £655.000 2 bed flat in a very average commune is a crime not a bargain.
In Brussels it will buy you a LARGE puropse built 4 bed with parking overlooking a park or lake..... and some change.
Londoners should start thinking about quality of life and value not only how much will it make in 2 years.

- Clive, Brussels Belgium

There is no real market right now. The credit markets will take time to recover and that may be a year or more away before a semblence of "normality" returns. In the mean time, just as we have seen in the Stock Market, prices can halve but equally double in very short order. They are simply not making anymore of London so those hoping for prices to fall further are going to be severely disappointed. Interest rates will fall quite a bit further which will cushion borrowers from the squeeze and there is a lot of oil money still looking for a home in London.

- James, New Malden, Surrey

i am one of those Bankers everyone loves to hate right now. perhaps its the Banks that should be given a pat on the back for providing credit (over the past 10 years)to those people who don't have a chance of repaying that debt. House prices have been totally inflated and out of control. We are in a recession and money (regardless of the efforts by govt.) will be hard to come by. Here is a lesson for all you non-bankers. Hit the bid, because there is no such thing as "the bottom". Estate agents are talking their book and trying to changes people's mind set. I'm afraid they in for a rude awakening....this is just the start. House prices are going to fall ANOTHER 20% at least. Why you may ask....because people have over extended themselves and need to weigh up their priorities....food in their families stomachs or a fancy house. i know which one is going to come out tops. Don't buy yet. The distressed seller is coming to the party. happy hunting

- David R, London

Talk of "snapping up" property only illustrates the greedy mindset that got us in this mess in the first place. Three times your salary should be the yardstick of affordability. Prices need to fall much, much more.
PS Have you seen that branch of Foxtons in Camden Town -- I expect to see tumbleweed blowing through it any day now.

- Jim Haley, London, UK

to all those hoping to buy cheap in a year, it aint gonna happen because people are not putting houses on the market, so there will be a shortage

- Peter, romford

this is an excellent report, I am having a guess the writer is an estate agent? house prices will continue to drop for the next two years so why would anyone buy now even if the gov. would like to try to reinflate the bubble with cheaper credit and massive inflation.

- John Brown, Bournemouth

Why buy now at overvalued prices when in 18 months prices will be on average 50% down and an over correction in some areas of 60-70% falls.

It is clear that if you buy now you will be in serious negative equity shortly.

A housing crash lasts years not months, any one who says its over as a vested interest in selling property.

- Gavin, London

1. I understand a 'bargain' to mean something sold for less than its market value. If a house is sold for a lower price because it is worth that lower price, how can it be a bargain?
2. If property is not a bargain, is it theoretically possible for a journalist 'reveal' something which is untrue?
3. Do estate agents have a financial interest in talking up the property market?
4.If the answer to the previous question is yes, if an estate agent says a 'window of opportunity' exists, should anyone take any notice?
Answers on a postcard please.

- Su, London, UK

How does supply and demand affect whether you can get a mortgage or not?

- Chris, Croydon, UK

This is complete joke. The Bail out will stabalise asset prices and the banks themselves, but where is the boost to property prices going to come from when there are 180,000 fewer jobs in a slimmed down City of London.

The banks are not going to be paying big bonuses across the board for a number of years, especially the part nationalised ones.

- Mike Livingstone, Reigate

If you put in a 25% deposit now, that will be wiped out within the year. The credit crunch hasn't even hit the real economy yet - when job losses start to really bite, there will be a real tumble. Gordon Brown, as usual, is being completely irresponsible in trying to prop up the market - and wiping out the deposits of first time buyers. The market is about confidence. That's not going to return until the economy is back on track and that will take years not months.

- Emily, London

So let me get this right, is a two bedroom flat in belsize park considered good value at £665,000? I would have to be earning 170,000 a year to get that, and if I was earning that much I would expect a little more.Prices have a little further to go down yet...sorry estate agents!

- Neil, Brighton

Houses are still over priced and if anyone buys a house right now thye will be upside down in no time. Only an idiot would buy a house right now.

- Brandon Thomas, London UK

Many properties are still over priced however you do have to balance the cost of rent if you are renting from the private sector.
I do however feel that prices will continue to drop for at least another year and that lenders will be forced to take great care before lending.

- Mike Melbourne, Bedford

Just look who is advising to buy. The vested interest whose businesses are failing because they can no longer ramp the property market. The global financial crisis is not the cause of falling house prices. The fall is becasue they have been at bubble prices relative to average earnings. The bubble has burst because of the lack of cheap and easy credit and the start a recession.

- David Barker, eastbourne uk

"Now is the best time to close a deal"..... "window of opportunity". Now that I have finished rolling around the floor laughing, I have to express my utter disbelief at the cheek and desperation of estate agents. London house prices have way further to fall as the workers in the Square Mile, whose outrageous salaries and bonuses fuelled London's ridiculous house price boom, now face losing their jobs or at the very best, suffering a great drop in remuneration for many years to come. Anyone who even contemplates buying in London now needs to lay off the crack pipe.

- Cameron, London

I have noticed a lot of arabic number plates (on Bentleys and Ferraris) in Kensington recently.
There are still people with money who will snap up the high end 'bargains'.

- Jimbob, Kensington

House prices have a long way to fall yet, I'd wait at least another year to see the bottom... no way will the sort of crazy mortgage multiples of 5x earnings be available any more. It'll be a fat deposit and 3x earnings, so unless Mr Average is on £100k+ a year the prices have only one way to go, down.

- Jeremy Logue, LONDON , ENGLAND

Top line Gary I couldnt agree more

- Bert, London

Jim Slater may be right that property will come back in 12/18 months because of need exceeding supply but that does not mean we should dive into buy now. As a multiple of disposable incomes, house prices have been far too high for a very long time and remain unaffordable to many people. The British obsession with house prices needs to be replaced with a sense of realism about the outlook for the next couple of years. Encouragement to borrow to invest in a falling market is the last thing people need at present.

- Simon, london

As others have rightly pointed out, this is a market which can go only one way in the foreseeable future, and that's down hard. The finance that blew the bubble up has evaporated, killing off the speculative purchaser gambling on making a capital gain the prospects for which have disappeared. Anyone who doesn't have to buy and isn't on crack, will sit this one out for a good while until the market has dropped to a level where they can afford a place they want to live without excessive borrowing

- Max, london

Whilst being absolutely thrilled at the fact the over inflated property market is now being brought back down to a realistic "earth" - along the lines of reasonable affordabilty and ,hopefully, in tandem with the average annual wage of a Londoner...I think that things ought to go even further. Common sense dictates that one shouldn't even contemplate purchasing a property now. I'd say everybody should hold off for another 6 months or so and see what happens. Maybe prices will fall by another 20% or 30% even, at least to a level whereby a person can actually put down a decent deposit and allow for their over heated credit rating to cool.

- Ali Sichilongo, London

House prices have got a further 30% to fall on the basis on a Hometrack survey. We will know when we have reached the bottom when the cost of renting and the cost of buying are the same. At the moment it is 30% cheaper to rent than to buy. The govt has got to cut interest rates, its got to make sure that banks pass on full rate cuts on their SVR and reduce their margins to cost because a third of all mortgage holders including 2 million who are coming off their cheap fixes by Nov 2008 will not be able to remortgage because there aren't the funds, banks are too dependent on credit files, and so many people will be stuck in negative equity due to the massive fall in house prices and will not be able to get a mortgage. Its not about profit. Its all about low payments to help people with their cash flow, plus have money to spend in the shops and loads of repossed properties won't help house price or be good politically plus until FTB can get on the market prices will just be frozen for years and there will be no govt revenue in terms of stamp duty. Help people keep their homes.

- Rupert, London

Chance to snap up a bargin, Yes but you must act quickly, house prices are set to rise NOT...and then you will never be able to afford to get on the housing ladder, and rent is dead money remember, blah blah blah.... keep feeding this crap to the youngsters

- Mike, London

Er, property for 499k is actually a 3 room dog kennel.

- Don Massey, Macclesfield

"Purchasers have been told that now is their best time to close a deal before the Government's £37 billion bank rescue restores confidence to the market." - Have been told by whom exactly? An estate agent by any chance? How about the contrary view which says that, since the only people who have been able to pay London property prices for the last 10 years have been bankers, the chances of a recovery now that most of them are going to have their pay set by Broon and his henchmen, is somewhat limited. Get real guys, this is just more blatant property price rampling by people who have no more economic insight than my pet cat.

- Derek, London

Great news! yes, the artificially inflated prices are down but have you seen some of the rates required for new purchases? To get a decent rate, you need at least 25% deposit. There is no more self certification or easy lending. If you have adverse credit, lots of unsecured debt, it will be harder. Its back to 3.4-4 x income and large deposits, oh and one other thing, lenders have increased margins on tracker rates on expectations of rate falls and arrangement fees have rocketed.

- Mortgage Broker N3, London, England

You would have to be on crack to buy a house right now.

- Garry, London

Anybody for a HIPS or other "smart" economic Nu Labor tax ideas??

- Georgie, Islington, London

House prices may be down 20% but they are still overvalued. The government is irresponsible by insisting that the 'bailed out' banks ( who control 45% of all mortgages) make large amounts of money available for mortgages. They are trying to manipulate the market in order to stem the amount of repocessions for political ends.

- Adrian, London UK

The examples provided are at the TOP end i.e. the prices of such properties are in their millions, and who has millions stashed away these days without having to go cap in hand to the banks which themselves are reluctant to lend - these top end properties will still fall further since no one in their right mind would still be able to afford them, looking at the bottom end of the market, I was able to buy a two bed flat in isleworth for £148K, which was the same price the owner paid for it in Jun 2003.

- Raminder Bhalla, Northolt

Yes, I'll think I'll wait another year for that 30 or 40% drop myself.

- Stephen, London

Yes- here we go- more air please
Prepare for the FINAL stage of the most massive property bubble in history
My prediction +40% over next year- Brown is just emulating Greenspan policies and really believes it can work- do you?

- Philip, Moscow

There is no point buying a property now: prices are falling fast so the sensible thing to do is to wait. Not even the most confident estate agent is saying that the property prices will reverse the collapse.

- Simon Powell, London

So now is a good time to buy hm? That always seems to be the case, and this particular "bargain" smacks of desperation. Personally, I'd wait - prices are bound to fall a lot further.

- Delphine, Oxford

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