THE housing market is experiencing its slowest rate of growth for more than a decade and concerns over the economy have led the former Iron Chancellor Gordon Brown to state that it's his number one priority.

We look at the property market in East Lancashire and what it means for buyers, sellers and estate agents.

FOR many homeowners and sellers in East Lancashire house price figures from the last quarter of 2007 make grim reading.

The last three months of the year saw house prices in half of area's boroughs drop significantly, the sharpest decline since the mid-1990s.

In the Ribble Valley average prices fell by 7.1 per cent to £226,660, in Hyndburn they dipped by 4.1 per cent to £110,323 and in Pendle the price has levelled at £117,239, a decline of 2.6 per cent.

And even though in Rossendale prices increased by 10.6 per cent, in Burnley by 4.8 per cent and in Blackburn with Darwen by 3.4 per cent, the picture nationally shows a slow down with some experts predicting a drop of 10 per cent before the slump is over.

Prime Minister Gordon Brown said the UK was feeling the impact of the global credit crunch, a phrase that seems to obtain a greater resonance as the year goes on.

For East Lancashire property experts the bleak picture being painted by many is only contributing to the sense of gloom, when more positive thinking could produce a more buoyant situation.

Ian Bythell, partner at HW Petty and Co estate agents, which is part of the Home Sale Network and has offices in Burnley, Nelson, Barrowford and Colne, believes the financial climate means a dose of realism is needed for many.

He said: "There is a downturn in the market at the moment, both nationally and locally.

"The lending policies of the banks are partly to blame because young buyers cannot get their hands on the deposits they need for houses which is not allowing people to sell. It's jamming up the system.

"We saw signs of it last year and it is a situation similar to that of the 1990s, even though we've had 10 years of growth.

"I think the slump will continue for the rest of the year and maybe much longer.

"I believe that the concerns over housing are creating a downturn in the whole economy because if people are concerned about spending on their house it has a knock-on effect.

"People love property in this country - thanks to the Margaret Thatcher era - and if there are worries about that it effects everything.

"It is a time for realism because it is becoming tougher to shift houses. There are buyers out there, just not as many."

Such was the concern over the economy and the state of the housing market that the Bank of England dropped interest rates to five per cent in an attempt to stabilise things.

However, Mr Bythell is not the only one yet to see the benefits of this fall.

Nick Hall, of Acorn Independent Financial Management, Blakewater Road, Blackburn, claims the credit squeeze was affecting existing borrowers and those who wished to go up the property ladder as well.

He said: "There remains an air of distrust between banks as no one really knows how exposed to the sub prime problem the various banks are, so what has happened is that the banks and building societies have stopped lending to each other.

"As the Bank of England rate improves then the banks and building societies are pocketing more margin as they are not passing on the rate cuts to their customers.

"Customers who used to be able to find 125 per cent and 100 per cent mortgages can no longer find them, products are continually being reviewed and withdrawn with lenders changing criteria even when customers have been accepted.

"Valuers and surveyors who are instructed by the lender to value property for the bank to lend against are now valuing property lower on the instruction of the now risk-cautious lenders.

"With such uncertainty many people are waiting to see what will happen, they are choosing to stay rather than move on and take on more debt.

"With fixed rate deals coming to an end remortgaging is in huge demand."

Simon Ainsworth, head of the residential property department at Napthens solicitors, Blackburn, claims there has been a noticeable downturn in the residential property industry, partly because there is so much negativity surrounding the market. He said Napthens had noticed that mortgage offers were being pulled as well, with some clients who have had mortgage offers having them pulled even after they have exchanged contracts on a property.

He added: "Lending criteria is stiffer, interest rates are higher and prices don't seem to be going down. That is leading to first time buyers not being able to get on the property ladder.

"I think the improvement will come if sellers of properties become more realistic on prices.

"In Blackburn sellers are starting to accept offers which are less than the asking price.

"If they are more realistic then more sales will start to go through and the market will pick up."