A new poll shows that UK housing prices will fall 5% this year and market analysts believe that it could get worse as a result of the soaring consumer inflation which limits the scope for interest rate cuts.

The poll conducted by Reuters show that the annual basis varied from a 10% fall to a 2.9% rise with a median forecast of a 5.0% drop in UK housing market.

According to the poll of 30 analysts drawn from banks, investment firms and research institutes, nearly a third of the respondents predicted a 10% drop in the poll, which was taken May 8-14. The median compares with that of a 0.8% in a Reuters survey in March, highlighting the deteriorating outlook.

On Tuesday, a slip up by housing Minister Caroline Flint,  raised the spectre of a property crash in her briefing notes for the morning cabinet meeting at 10 Downing Street that was captured on camera and read by reporters.

During the briefing, the Minister, described a fall of 5% to 10% in mortgage,-loans.aspx" title="house prices">house prices as a best-case scenario, adding: “We can’t know how bad it will get.”

The disclosure undermines government attempts to maintain public confidence in the face of a slew of bad news on the housing market.