2012 will be a tale of the haves and have-nots according to Robin King director of Move with Us.

“Those who are able to will continue to de-leverage their debt levels using lower interest rates to pay off substantial chunks off their mortgages,” said King. “People in arrears will continue to suffer as they see the value of their asset eroding while struggling with the higher cost of living and job uncertainty.

He added: “Generally, the housing market will remain flat with low levels of supply in the market as families choose to reduce their mortgages rather than move. Most of the demand for housing will be in the private rented sector due to the lack of higher loan-to-value (LTV) mortgages and the threat of unemployment. We are expecting to see around 700,000 private treaty transactions in the residential housing market next year, which is slightly lower than the numbers in 2011.

“However, it won’t be all doom and gloom; there will be hot spots around the country where economic activity has remained strong and where new infrastructure improvements open an area up to more commuters. In areas worst-hit by the downturn, we expect to see house prices slide backwards gradually.

“We have seen a rush for property in central London by overseas investors over the last few years and this will no doubt continue into less fashionable areas of London as prices push prices up in the suburbs.

“There are also a number of key areas to watch next year in terms of seeing house price rises. Canterbury has become an appealing place to live as the new high speed link into central London makes it a very desirable, historic city with access to the coast and the continent. Cambridge and central Oxford are also ones to watch as we expect that they may also experience slight house price increases as they have an undersupply of housing and a highly skilled workforce to house, plus high employment figures,” King concluded.