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By Rachel Jones
Know Your Money Editor

The message is clear: the property market is set to continue to fall throughout 2009. Yes, Britons are to witness thousands of pounds being wiped off the value of their homes, according to banks, estate agents and other sector commentators. According to a recent report by the Land Registry, the average price of a property stood at £161,883 in November. This marks a 1.9 drop from October's prices and a 12.2 per cent reduction from the same month in 2007. Every region in England and Wales saw a decrease in property values over the past year.

However, the location with the highest annual price fall is the east midlands, with a movement of -14.2 per cent. And although Wales witnessed no monthly change in November, the south-east saw the highest monthly price fall of 3.2 per cent, the Land Registry continues.

"In the months June 2008 to September 2008, transaction volumes averaged 48,599 transactions per month. This is a decrease from the same period last year, when sales volumes averaged 115,697," the report notes.

But while such findings may concern those people looking to sell up or who were relying on a high-value home as financial security, others say that the price drop provides first-time buyers with a leg on to the property ladder.

Price predictions for 2009

According to the Rightmove House Price Index, asking prices will bottom out by the end of 2009, having dropped by ten per cent. Making his predictions, commercial director of Rightmove Miles Shipside claims that the best buys found on the market will be at the expense of those forced to sell their home for lower than they originally desired. He continues, adding that it will be middle-class owners who have taken out large mortgages to pay for their homes who will be hit the hardest. Rising unemployment and repossessions will add to this misfortune.

Indeed, the Guardian reports that the closure of 2,000 estate agency offices, a 40 per cent price drop for new homes and a 15 per cent reduction for second-hand properties have resulted from the 2008 meltdown, boosted by restricted mortgages, a burst of city-centre flats and overinflated house prices that was seen previously.

"The mainstream market will bottom-out at the end of 2009, or the beginning of 2010, having fallen 25 per cent from its peak," says Savills' research chief Yolande Barnes. Furthermore, peak prices will not be regained across the UK until 2014, although central London will see such a recovery a year earlier, Savills adds.

Indeed, Nationwide previously predicted that house prices would continue to fall well into 2010. And Ian Perry, a Royal Institution of Chartered Surveyors spokesperson, says that banks restricting their mortgage lending will also lead to a low volume of sales and a need for sellers to further wipe the pounds off their asking prices.

First-time buyer fortunes

But while many Britons may have to sit tight and ride out the wave of property freefall, first-time buyers, for example young families and professionals, can enjoy affordable housing. According to Halifax, the proportion of local authorities where housing is cheaper for those stepping on to the property ladder more than trebled during 2008. And more people may be searching for the best deals for first-time buyer mortgages, bolstered by expectations of a further interest rate cut by the Bank of England. Indeed, the house price to earnings ratio fell from a peak of 5.84 in July 2007 to 5.56 in November of this year, the bank claims. This makes it at its lowest level for over five years and indicates affordability.

Commenting on the figures, Martin Ellis, chief economist at Halifax, says: "There has been a marked improvement in housing affordability in many parts of the UK. First-time buyers, in particular, are benefiting, especially outside the south of England and the Midlands. We expect this trend to continue in 2009."

Paul Holmes, chief executive officer of Firstrung, states that first-time buyers who have high job security and are able to save a substantial amount can find themselves bagging a bargain when it comes to purchasing a property. Saving up a favourable deposit can also mean that they can afford to take out a smaller mortgage, he adds.

Battening down the hatches

Britons who have until now relied on their home as a nest egg may want to consider their finances in 2009. Taking out a small personal loan, or merging money owed into one monthly payment through a debt consolidation loan, could prove useful for those wishing to undertake home improvements to boost the value of a property.

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