THE housing market is one of the most high profile markers of the recession.

When house prices began to fall more than a year ago, it prompted the first discussions of a possible downturn, perhaps akin to the housing slump of the 1990s.

One year on and it is clear that the economy is in a far worse state than predicted.

Two weeks ago came the news that almost one million houses were in negative equity – that is, that they were worth less than the value of their mortgage.

If the current trend continues, two million households will enter negative equity by 2010.

That is 200,000 more than were affected at the lowest point of the 1990s slump.

The north west is the worst affected region in the country.

The National Landlords Association recently revealed 37 per cent of landlords had tenants in arrears.

Over the past six months, 44 per cent had experienced rental arrears, which the NLA said explained the rise in repossessions and why more and more landlords were struggling to meet mortgage repayments.

There are contradicting reports of the state of the housing market.

In March, Nationwide reported a 0.9 per cent increase in house prices but Halifax reported a further decrease of 1.9 per cent.

Nationwide predicted 2009 will continue to be tough in the housing market, citing rising unemployment, low consumer confidence and restriction in the mortgage market.

The speed that house prices are falling at, however, has steadied, said Forshaw Davies Ridgeway.

The Warrington law firm has seen a month on month growth in residential property instructions since December.

Warrington’s Forster Dean Solicitors also report an increase in housing sales.

“The signs are definitely encouraging,” said Michael Collins, head of conveyancing at Forster Dean.

“Over the past six weeks we have seen an increase of over 50 per cent in new instructions and our active case load has increase by over 50 per cent.”

The business was spiralling downwards until December, he said, but since then has been getting busier and in March had a ‘great’ month.

The most recent survey from the Royal Institution of Chartered Surveyors also indicated a rise in new instructions to sell from householders.

Newly agreed sales also jumped by 76 per cent in the north west compared to the previous month and new buyer enquiries increased nearly five fold.

RICS put this down to the drop in asking prices and the sharp fall in the cost of borrowing.