Nigel Hare-Scott of equity release firm Home & Capital believes that UK property prices could start falling significantly next year, emulating the movement of prices in the US, where homes have dropped in some areas by up to 18 per cent in the past 12 months.

'Although we normally advise people to consider equity release once they reach retirement, if prices fall here it will restrict the amount they can release. So they should consider bringing forward that decision,' he says. 'I'm already finding that surveyors are valuing houses for less than people are expecting.'

Hare-Scott has stuck his neck on the block by speculating that UK house prices could fall by as much as 30 per cent in some areas, a view that many others in the housing industry would regard as extreme.

Miles Shipside, commercial director for property website Rightmove, says it is unreasonable to expect the US and UK property markets to react in the same way: 'The US has had 17 consecutive rate rises, while we have had five, and [US lenders] appear to have been less careful and regulated in lending, particularly on teaser rates.' This has left many borrowers, who took a short-term fix when the US base rate was 1 per cent, unable to meet their monthly mortgage payments now the base rate has risen to 5.25 per cent.

He also points out that greater amounts of space and a well-developed building industry in the US has enabled developers to supply huge amounts of new property - or, in some areas, over-supply it, resulting in falling prices.

While price rises have now levelled off throughout Britain, and Rightmove's own survey, released last week, shows that properties are actually falling in value in some parts of London, most property experts remain sanguine about short-term prospects.

The Royal Institution of Chartered Surveyors believes that its most recent survey, which assesses surveyors' sentiment about the market rather than actual selling prices, indicates a slowdown in house price inflation rather than a fall in prices.

RICS chief economist Simon Rubinsohn says the recent stock market volatility will push up the cost of borrowing at fixed rates and make it harder to borrow: 'There is already evidence that lenders are becoming more discriminating in advancing loans to borrowers, and this could be compounded by possible job losses in the City if the volatility persists. The potential for lower bonuses in the financial services industry could also cast a pall over the property market.'

However, he points out that the economic fundamentals which could spark a downturn in house prices if they got out of control all look healthy: unemployment and inflation are low, while corporate figures are healthy.

Ed Stansfield, property economist at Capital Economics, says prices could fall by 2 or 3 per cent in the north west, north east, Yorkshire and the Midlands next year because houses are expensive there in comparison to local incomes. But these falls will be offset by further small rises in Scotland, London and the south east.

New-build property prices could also experience a fall if buy-to-let investors hold off from committing their money; and Stansfield says he would be surprised if buy-to-letters continued pouring money into a market where price increases were slowing.

'It's very difficult to cover your monthly outgoings through rent at the moment,' he says. 'It would seem an odd time to invest. The new-build sector might feel a bit of a pinch from that.'

A stagnation in prices could result in an increase in first-time buyers in a year or two's time, he says. While house prices remain level, first-timers will benefit from salary increases and a chance to build up a bigger deposit.

However, the news is not so good in the longer term. Stansfield says the fact that many people have taken out fixed-rate mortgages in the past few years has protected a large part of the home-owning public from interest rate rises. He believes prices could fall more substantially when large numbers of these fixed rate periods come to an end in 2009.