The slow down in the economy has diminished in the last year and in general house prices have shown a slight increase. But first time buyers are still struggling to qualify for mortgages, raise deposits and get on the housing ladder. This has a knock on effect that those looking to upgrade cannot sell their small starter home.July and August showed that house prices and sales had increased for these two months, but overall for the year, the market remained stagnant. Most growth and really the only growth was shown in London and areas around the South East and East Midlands.Looking back at 2008 and 2009, there was a very very bleak picture. The property market went from booming to bust in a year. Agents were selling less than one property a week, when taking an average over the year. Prices had risen by 200% in ten years, then the bubble burst, with the credit crunch, starting in America and spreading across the sea. Banks and lenders had bundled mortgage packages together, sold these securities off to others, who then sold on the debt. It was a quick easy return, but then people stopped being able to afford their mortgage, many were living close to the bread line with high credit and toppled over. Suddenly there was no money coming in to pay the debts and it all collapsed. The banks panicked and stopped lending and a vicious circle began, with less home buyers being able to get a mortgage, less being able to buy a home, property prices fell, banks reigned in lending even more. The availability of mortgages keeps the property market going.Some longer term forecasts are predicting that prices will go up as there is a definite lack of housing and no sign that the Government will back or put money into large scale house building. Even if house prices were to rise around 15% over the next 5 years, this is still less than 3% annually and so a much slower rise than in the boom of the 1980’s and the 2000’s. But others are saying that this is only the start of a slow, very drawn out downturn. This is backed by the fact that the number of house sales and people buying homes was at its lowest level in nearly thirty years, despite mortgage rates being incredibly low. The number of mortgages given out was very low, lower in fact than in the property slump of 2008 and 2009.Anyone looking to sell their home in 2012 or 2013 needs to be realistic and flexible on price. The biggest hurdles to the property market is the reduction of interest only mortgages, stringent mortgage conditions meaning only 50% of mortgage applications are approved, high deposits still being required and uncertainty in the job market and economy as a whole. The cost of moving is also higher than ever with massive estate agent fees, stamp duty, removal company fees, search fees, legal fees and so on. On average a house buyer of an average family home needs an additional Â£12000 to Â£15000 just for fees and removal costs. In general living costs are rising, wages are not and with public sector cuts likely to start taking effect there will be further job losses. None of this paints a rosy picture for the next few years for the UK property market.Many sellers are still reluctant to reduce their prices, while buyers are holding out for bargains. Many houses are sitting on the market for years or being withdrawn completely from the market and rented out privately instead. For those able to save large deposits, there are some very good mortgage rates around.So is there a glimmer of hope in this gloomy outlook. Property prices have fallen by around 20% and so for investors and those with available cash, it is now a good time to consider purchasing property. Decent sized family homes in good areas are in short supply, as are good private rental properties and these are still fetching a good price.