This is a good time to be starting a weekly column on the housing market. The storm clouds are gathering, the forecasters are slashing their house-price predictions and talk of crashes and negative equity is back. Some monthly price indices are showing falls, though others such as the Nationwide – up 1.1% last month – are still rising.

So what is going on, how gloomy is it going to be, and are we doomed to follow America? There, according to the Case-Shiller index, which measures house prices in 20 of the largest American cities, prices are down by 4.4% in 12 months, with those in Tampa, Florida 10.1% lower. The last time America experienced anything like this was in the early 1990s, the time of the great housing crash in Britain.

Let us, like Donald Rumsfeld, the former American defence secretary, deal first with the “known knowns”. The best measure of housing demand is mortgage approvals for house purchase, with the figures produced monthly by the Bank of England.

In September, according to figures released last week, their number fell to 102,000, down from 108,000 in August and a six-month average of 112,000. Compared with a year earlier, approvals dropped by almost a fifth. So demand is clearly weakening.

How to fight your way out of a housing market slowdown

Do you have the clout to tough out the downturn? Emma Wells and Lucy Denyer sort victors from victims

Background

• Housing market analysis: the plight of first-time buyers

• Home economics - January's shock house price stats

• Home economics - the property market

• The harder they fall

• Home economics

Background

• Wise up to size

• The property market: October 21, 2007

• Shires fall to foreign land rush

• House price gloom as the wealthy turn away

How to beat a property market slowdown

The market is cooling. But learn the rules and it could work to your advantage

• Why won't my house sell?

Background

• Empty homes: the mystery of the UK’s million vacant homes

• Opening bids: Why the Government must do something about Britain’s empty properties

• It’s dire in the shires

• Cash in on your biggest asset

Smoking ban: a drag on prices?

Paula Hawkins examines whether house prices have gone up in smoke

Background

• Misery for over-extended and over-indebted

• UK house market is ‘heading for crash’

• The property market: October 14, 2007

• Held to ransom

But by how much? A bit of recent history might be useful. In November 2003, approvals were riding high at 133,000. Then homebuyers started to feel the effect of a rise in interest rates by the bank, from a 50-year low of 3.5% early that month to 4.75% by the following summer. By November 2004, approvals had dropped to 76,000, a fall of 43%, and house prices appeared to be teetering on the edge of a sharp fall.

But the bank stopped raising rates, homebuyers breathed a collective sigh of relief, mortgage approvals picked up strongly and by August 2005, when the bank announced a one-off quarter-point rate cut, they were back above 100,000. From the summer of 2004 to the early autumn of 2005, house prices stagnated, but did not fall. By the end of 2005, confidence had returned and prices had embarked on a renewed climb.

So, is history repeating itself? Then, as now, we saw five interest-rate increases by the bank. Then, as now, approvals fell sharply. The Council of Mortgage Lenders, for one, predicts a period of stagnation, with prices rising by just 1% in cash terms next year (and falling slightly when adjusted for inflation). Most economists – including this one – think a house-price crash will not happen in the absence of recession, sharply rising unemployment and a bigger rise in interest rates than we have seen.

But there is also a Rumsfeld “known unknown” hovering about. To what extent will the credit crisis that erupted in the summer have an impact on people’s ability to borrow? Could this be the trigger for something nastier? Kate Barker, the bank’s housing-market expert, says it is not clear that the events of August and September should have a big impact. That, however, is going to be the key question for the coming months.

Times recommends

• Fall in house sales hits builders, estate agents and mortgage brokers
• Why the property credit crunch favours cash buyers
• The blood-curdling history of Quarrelwood House