Such is the view of economist Hetal Mehta from Ernst & Young, who warns that a drop in mortgage approvals in January reinforces the fear that “the market is running out of steam”.

The latest survey from the Royal Institution of Chartered Surveyors (RICS) also warns that its members have seen an increase in the number of new instructions from sellers.

Simon Rubinsohn, chief economist at RICS, said: “Supply is certainly catching up with demand as sellers return to the market, which will hit prices.”

Rubinsohn expects any increase in house prices in the first half of the year to be erased in the second half. Economists agree that whoever wins the election will have no choice but to cut public spending, which will mean large scale job losses in the state sector.

The resulting unemployment may well bring downward pressure to bear on property prices. And whenever the Bank of England next changes interest rates, it can only put them up from the current historic low of 0.5%. This will increase the cost of all types of borrowing and present another obstacle to a recovery in the housing market.

Mehta said: “Even a small rise in the base rate will come as a shock to homeowners on very low mortgage repayments.”

A rise in interest rates and unemployment risks being compounded by more mortgage rationing later in 2010 and going forward. The mortgage market has recovered slightly so far this year, with more lenders offering more products as competition has returned at a modest level. But total lending is still a fraction of what it was – it is expected that something in the region of £150bn will be lent this year, compared with £360bn in 2007.

With mortgage lenders facing a funding gap, and from January 2011 having to repay the financial support they have received from the Government since the start of the credit crunch, their ability and appetite to provide mortgages may well diminish once again.

The resulting mortgage drought could cause a fall in demand for property as fewer people will have access to funding, thus forcing property prices down.