For many with mortgages, the value that has been borrowed could be greater than the value of the property.
The Royal Institute of Chartered Surveyors (RICS) says that although the house price balance has improved slightly for the first time in ten months it still remains "a significantly depressed figure".
More than 92.9% more Chartered Surveryors reported a fall than a rise in house prices, a decrease from 94.7% in April.
The average number of transactions per surveyor over the last three months is now at 17.4, which is the lowest figure since 1978.
There is also a continuing lack of demand and surveyors have reported new buyer enquiries as "still well into the negative territory".
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RICS spokesperson Jeremy Leaf said: "While demand remains weak and housing transactions continue to evaporate, there is a very real danger to the wider economy.
"The property industry will not be the only casualty in the fall out from the credit crunch, with the high street and purveyors of a range of household goods, including furniture and white goods also feeling the pinch.
"Construction workers such as plumbers and bricklayers will start to see employment opportunities dry up as the pace of housing transactions continues to abate."
There have also been reports that people who have taken out 100% mortgages in the past year could face negative equity.
However, it is understood that the 23,200 who have taken out these 100% mortgages represent just 2.5% of the total mortgages given out in that period.
As the credit crunch continues to cause ripples making lenders less willing to loan money, young people trying to get on the property ladder could be turned away if they don't have a deposit.
Michael Saunders, Head Economist at Citigroup says that house prices are down 6% in the last five months and that "the worst of the credit crisis" lies head.
In Northern Ireland, house prices are continuing to fall and some are down to the same level they were two years ago.
However, it is also reported that mortgage arrears are still low.
(DS/KMcA)
