The storm clouds looming over the housing market grow darker every day. But for some aspiring homeowners there could be a silver lining, with bargains emerging as asking prices tumble and sellers become ever more desperate to get properties off their hands.

It takes courage to buy at a time when some commentators are predicting that house prices could fall a further 15 per cent. Even Britain's biggest lenders and surveyors, which have an interest in talking up the market, now admit that they expect property prices to fall.

Asking prices for properties new to the market were down by an average of 0.1 per cent over the past month, according to Rightmove.co.uk, the property website. In some regions the slide has been even more severe: in the North West prices fell by 1.4 per cent and in London by 0.9 per cent. And it could become much worse. David Miles, chief economist at Morgan Stanley, the investment bank, says that up to 1.2 million people - one in ten homeowners - could be pushed into negative equity, where their mortgages are greater than the value of their property.

As the gloom spreads, though, bargains are beginning to emerge. Michael Holt, of Charterhouse Standard Holdings, has been buying residential property on behalf of private investors for more than a decade and says: “We are spotting some great bargains. Even if the market continues to struggle in the near term, buy and hold for five or ten years and you will almost certainly make a healthy profit.”

Some of the best deals can be found at auction. Most of the properties that come up for sale are not suitable for a typical family home. Many are in poor condition or are buy-to-let properties with problems.

Repossessions account for a large percentage of auctioned properties and the Council of Mortgage Lenders predicts that more than 45,000 homes will be repossessed this year, against 27,100 last year.

However, if you are are an aspiring landlord or are interested in buying properties that are out of the ordinary, auction houses can be a happy hunting ground. Savills Private Finance, the mortgage broker, says that buyers can get between £10,000 and £20,000 off a typical three-bedroom house.

Savings can be even more substantial. Karen Davies and her partner, Dan Pironti, bought a six-bedroom house in Clapham, South London, at auction recently for £370,000. Ms Davies says: “Similar properties have been selling for about £500,000 on the open market, so we have a fair buffer if house prices fall. Although it needs a bit of work, everything is functioning. We had a survey done and there were no major issues.”

Even if you do not want to risk buying at auction, the slide in asking prices means that the market is moving in your favour. Propertysnake.co.uk, a website that monitors falling prices, says that some desperate vendors have reduced asking prices by as much as 44 per cent as the credit crisis has worsened.

Jeremy McGivern, of Mercury Homesearch, the property agency, says: “There are a lot of stressed vendors out there willing to accept a surprisingly low offer, especially if you are willing to play a long game. After a period of misplaced optimism, when they may have turned down offers of 10 per cent below the asking price, a vendor's state of mind can change quite dramatically.”

Gazundering, where buyers demand discounts off an agreed purchase only days before contracts are due to be exchanged, is even making a comeback. Although many people regard this as an unsavoury practice it is completely legal and can be a way of cutting thousands of pounds from the price you pay.

People wanting to move to more desirable areas or a bigger property could also benefit. They may have to accept slightly lower offers on their own homes, but they can make lower offers on their target properties. For example, if you owned a property valued at £200,000 and prices fell by an average of 5 per cent, you might receive £10,000 less when you sell. But if you were buying a property valued at £300,000, you could save about £15,000, leaving you with £5,000 more than if house prices had remained static.

You are more likely to get a good deal if you can pay cash or have a mortgage offer in place. Miles Shipside, of Rightmove, says: “It is a buyers' market, but only if that buyer is buying with cash or can put down a good deposit. Our advice is to line up your mortgage in advance.”

If buying a property does not appeal to you as a way to make a profit, you could try spread-betting on falling house prices. Several betting companies, such as Cantor Spreadfair and IG Index, will allow you to bet on the future direction of house prices: usually for the UK as a whole and Greater London. However, it is a risky business - unlike fixed-odds betting, you can lose more than your original stake.

How to buy at auction

Properties sold at auction have two prices. The guide price gives a rough idea of value and the reserve price is what the vendor wants to achieve before a sale goes ahead. If the bidding stops before the reserve price is reached, the property will usually not be sold. However, auctioneers say that vendors could be open to offers, given the current difficult market conditions.

If you win the bidding on the day, the deal is binding and the property is yours. You have to put down a deposit, usually 10 per cent, and pay the balance within 28 days.

However, the risks should not be ignored. Even if a property sounds like a bargain there may be good reasons why it is cheap. It makes sense to have a valuation and survey done before you bid so that you know how much work will be involved and to ensure that you are not paying over the odds. A survey will cost up to £800.

Most banks and building societies are willing to lend on auctioned properties, but as they become more stringent about who they lend to, many will not turn round an application in the required time. If you do not meet the 28-day deadline, and the vendor is unwilling to wait, you lose your deposit.

Futureauctions.co.uk lists forthcoming auctions and provides links to auctioneers' websites.

Case study: Bagged a bargain

David and Karen Morgan, above, bought a three-bedroom semi-detached house in Swansea, South Wales, at auction last week for £152,000.

The couple, who run a property business, were pleased with the price they paid because similar houses have been on the market for more than £200,000. The property requires modernisation, but the couple hope that they will be able to sell for a sizeable profit after the work is completed.

Their succesful bid was not made during the official auction, which failed to achieve the reserve price set by the vendor, so the house was withdrawn unsold. Mr Morgan explains: “We asked to speak to the vendor, who was present at the auction. After a short discussion he accepted our offer. Once we have completed the renovations we hope to sell for at least £240,000.”