The latest figures from Chesterton estate agency suggest that the value of the bottom 20% of the UK housing market fell by 0.1% in the past month.

However, the same research reported that the top end of the market  increased by 0.3 per cent - rising to £1,117 billion. Commentators have speculated that huge price inflation at the very top of the property ladder- big country houses and large family homes in London- is offsetting price falls elsewhere. Chestertons say that annual growth for the UK now stands at 5.6%.

Douglas McWilliams, chief executive of the Centre for Economics and Business research struck an optimistic note: "House prices are probably not doing quite as badly as the headlines from some of the mortgage providers imply,"

"With mortgage advances down 40 per cent on a year ago, their mix has changed and their year-on-year comparisons are affected.

The real reason for the slow down in the property market is the liquidity crunch affecting the money markets, so says Chesterton’s Richard Davies. "As the impact of the credit crunch feeds through to the property market, we are noticing buyers are becoming more cautious,"

"While price reductions are more common in the bottom end of the market, the top end is certainly not immune. There is a trend of buyers at the upper end of the market who require no or very little finance and therefore are not impacted by the credit crunch."

The Mortgage Provider