Consumers are being urged to take steps to protect themselves from falling property prices, increased bills and the prospect of job losses.

Last week the stock market suffered another volatile run despite the much-vaunted recapitalisation of the banks. Unemployment figures showed 164,000 more jobless in the last quarter, taking the total to 1.79m.

Analysts at Capital Economics expect the jobless total to rise by another 1.5m by the end of 2010. It predicts house prices will fall by another 25% before they recover — even if the Bank of England cuts rates from 4.5% to 2.5% by the end of next year.

Martin Ellis, chief economist at Halifax, has also revised his prediction and suggests Bank rate will fall to about 3.5% by the end of this year, and to about 2.5% by the end of 2009. “The Bank has clearly changed its thinking on inflation risks as the economy slows down,” he said.

However, there are plenty of ways to protect yourself if you act now.

Ask your lender to keep rate cuts

It may sound perverse, but it may be the best way to protect yourself from further house-price falls. Many people find that when they come to remortgage, they cannot get such a good deal because the amount of equity in their homes has fallen along with house prices. However, by maintaining your repayments at existing levels even as mortgage rates fall, you could overpay your debt and boost your equity.

Suppose your property is valued at £420,000 today and you have a mortgage of £252,500 (60% of the property value), on a three-year tracker — currently at 5.44%. Your monthly payments would be £1,538 on a repayment basis over 25 years. If Bank rate fell by another two percentage points, your payments would reduce by £285 a month.

However, if house prices fell by 10% over the three years, your loan to value would increase to 61.3%, shutting you off from the cheapest deals when you come to remortgage.

If instead you used the savings to overpay, after three years, your outstanding mortgage would be £221,098, giving you a loan to value of 58%.

Richard Morea of brokers L&C Mortgages said: “By overpaying, you’re protecting yourself when you come to remortgage, assuming house prices fall. If prices fall by less than 10% over three years, then you may even be able to get a better deal.”

Most lenders allow you to make overpayments of up to 10% a year without a penalty, although some have caveats.