The futures market has downgraded it expectations for house prices which now points to a fall in cash terms of more than 40% from the peak in August last year to the bottom of the market in 2011.

According to Tradition Future HPI an average house measured by the Halifax index will drop from £201,081 in August 2007 to £114,347 in October 2011. In real terms that is a drop of more than half.

Personally I think that various factors will prop up the market, for instance investors looking for rental property moving in.

There is, however, a further issue clouding the picture and that is that as house prices are continuing to fall the market is freezing up more and more. This makes any measure of house prices less and less meaningful.

Just because an index says house prices have halved it doesn’t mean you can expect to buy the house of your dreams at half price…the seller may have another view of the price.

Disconcertingly, what may eventually “thaw” the market is a sharp rise in unemployment sparking a wave of distressed sales.

But given the current slew of shocking economic news and the radical interventions by the authorities globally, I for one will not be making any house price predictions, other than to say they will continue falling for a wee while yet.

In the current market it seems that even the most unthinkable is possible.