There is no doubt that the state of the UK residential property market is a tough one to predict. Talking to top companies in the industry, one of the biggest problems they have at the moment is planning. Prior to the Credit Crunch and even in previous recessions, there used to be a pattern for sales and values. Now what most companies in the market are struggling with from one week to the next is that you are never quite sure how many sales are coming your way.

From an investor's perspective, particularly those in it for the long term, predicting the future is even more difficult when you factor in local issues such as supply, demand and affordability.

Residential property in the past has been a pretty predictable investment. Hold it for long enough and it will deliver a decent return - particularly if you leverage it via a mortgage. For example, Nationwide run a chart which tracks how much property prices have grown over and above inflation over the last 30 years.

If you invested in an 'average property' in 1980, then it would have cost you £80,000. If you still owned that property, even though we have had two recessions, the property would now be worth £160,000. Nationwide calculate that this equates to a 2.8% annual increase in capital value over and above inflation. From an investment perspective, this annual return would increase dramatically if you only invested the deposit, buying and maintenance costs and borrowed the rest of the money via a mortgage.