Nationwide chief executive Fionnuala Earley has admitted that it is difficult to forecast the state of the UK property market in 2009 because conditions still remain "highly volatile".

She commented that 2008 could be summed up as a "year of turmoil"for the property sector, as house prices fell by an average of 15.9 per cent to their lowest level since 2005.

"We did not anticipate the speed of house price falls or the extent of the global and domestic economic slowdown,"Ms Earley reflected.

The economic downturn has benefitted many private landlords, because some would-be homebuyers have switched to renting after being unable to secure mortgage finance.

But 'accidental landlords' - who opted to rent out their homes instead of selling at distressed prices - have also flooded the rental market.

Chris Jenkins, manager of buy-to-let mortgage lenders Clarity Commercial, suggested this month that free incentives, such as bus passes, are being offered by some private landlords to try and rise above their competitors and secure tenancy agreements.ADNFCR-2002-ID-18982955-ADNFCR

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