BOLD MOVE COULD LAND A NEW HOME BARGAIN

Only when the purchase reaches completion do buyers have to produce the money for their home. The Bond runs for an agreed period, at a rate of interest below that charged by High Street banks.

Redrow Homes, building more than 5,000 homes a year, has signed up with the Zurich Property Deposit Guarantee, based on the personal credit standing of the potential buyer against a specific property purchase.

Zurich, a recent entrant to this market, has also signed up Barratt Homes, which builds more than 21,000 homes a year.

Says one leading builder in Southern England: "The problem is that the market is likely to be extremely quiet until the New Year, when economic prospects might be a bit clearer.

"Homeowners and new buyers will tend to think there is no real benefit in committing to a purchase before they know where they are."

Unofficial reports suggest new home reservations could have plunged 20--30% in the last six weeks.

Barratt, another leading builder which acquired David Wilson Homes at the peak of the market, has mortgage subsidies in place guaranteeing buyers a 3% rate on their loans for the first three years.

Even the latest Housing Market Report (HMR) from the Home Builders Federation (HBF) accepts the market is "weakening"- fairly dramatic language by normal HMR standards. It says demand fell most steeply in June, July and August.

It goes on to warn: "In August, house builders reported the sharpest year-on-year decline in net reservations since June 2005.

"Exceptionally poor weather in July and August must have had some dampening influence on this year's results."

The HMR says "the most striking" change in the new homes market has been the sudden disappearance of investor buyers - although they are still evident in South-West, East Midlands and Wales. Some 43% of firms surveyed say investor demand has fallen.

The survey says every region except East Midlands recorded a year-on-year decline in new home reservations - with the steepest decline in the North-East and Wales.

The HMR also says that builders' share prices have fallen heavily in recent weeks - partly because the City sees building firms at the centre of the storm if the credit crunch worsens.

:: INFORMATION: Exchange Bond (01371 877 202 and www.exchangebond.com) has linked up with more than 200 house builders; Zurich Property Deposit Guarantee (0845 882 2888 and www.theexbond.com)

:: SELLERS CAN GET RENTAL PROMISE

Around 750,000 homeowners on fixed-rate mortgages face a steep rise in monthly repayments when fixes expire during the next nine months, and if they get into difficulty, dozens of companies might offer them a deal.

They will buy the property in weeks - and allow the owners to stay on as tenants as an agreed rental.

However, these companies pay only 80-90% of open market value, plus costs and fees - and many are actually landlords quietly building up their buy-to-let portfolios.

Reports suggest that 200-300 companies could be operating in this sector - with widely varying standards. Some unscrupulous operators offer a tenancy agreement - and then seek a rapid eviction a few months later to snaffle a quick capital gain.

A Quick Sale is one of the better-known "property purchasers" - and its managing director, Richard Watters, wants to distinguish himself from the rest of the field.

So he's launching a Tenancy Guarantee Agreement, a legally-binding document which commits his company to renewing the Assured Shorthold Tenancy Agreement on the property on a rolling basis for a pre-agreed period of time, typically five years or less.

The agreement also guarantees the rent will not be increased above the initial rental amount to a sum in excess of market rent rates.

Mr Watters also promises his company will pay "substantial" compensation if, for whatever reason, the terms are not honoured.

He says: "We would only ever complete a sell and rent back sale if we had every intention of letting the person or family remain in the property for as long as they wished.

"However, we are not legally able to offer more than 12-month contracts at a time, which can leave some customers with concerns that they may have their house sold on by their landlord, forcing them to move."

If A Quick Sale is "unable to honour its pledge" to a new tenant, it will pay compensation of £5,000 or 5% of the price paid for the property, "whichever is the greater".

Mr Waters wants tighter regulations on the sector, on the lines of codes which oblige financial institutions to deliver a fair deal.

Currently, A Quick Sale buys in more than 2,000 homes a year. About 1,000 of those are rented back to the previous owners.

:: INFORMATION: A Quick Sale (0800 328 8239 and www.aquicksale.org) also offers a free eight-page Guide to Sell and Rent Back.

:: HOUSE SALES SET FOR BIG PLUNGE IN 2008

One of Britain's leading estate agents is predicting that the number of sales in the housing market could plunge by as much as 40% in 2008.

The total number of sales which will be around 1.2m in 2007 could fall to 800,000 or even lower in 2008, says leading London and country agent Savills.

But this sharp contraction in the market won't necessarily see prices plunging, says the agency which expects actual falls in prices only in certain areas, and in specific sectors like urban flat blocks where supply far exceeds demand.

Overall, Savills is sticking to its prediction that "national mainstream prices" in 2007 will grow to within 0.5% of its forecast of 7%, with Prime Central London showing an 18% rise even with minimal growth in the final quarter.

But in 2008, it says the overall price rise across the UK will be only 3%, with London up 5% and Prime Country Houses up 4-6%. These figures are far removed from suggestions by the International Monetary Fund that Britain's house prices could be overvalued by as much as 40%.

Says Savills residential research director Yolande Barnes: "The IMF is not adding anything very new to the analysis. It is too high level, too crude and is really a very broad brush global analysis of the basics, which fails to take in specific supply side factors; for example, in the States, falls are much steeper in areas of high supply like California than in centres like Chicago and Manhattan.

"So far as Britain is concerned, the IMF takes no account of regional supply and demand levels, or the impact of existing equity in the market place - the profit which people have made on their present home and will take with them to the next property.

"In London, some £15billion has come into the housing market during 2006 from bonuses, City money and overseas investors, which has obviously had huge impact. That's the sort of factor which the IMF has completely overlooked."

Other housing market statisticians are equally sceptical of the IMF findings, in particular its failure to take into account Britain's relatively small private rented sector which leaves households with little alternative to home ownership.

However, Yolande Barnes at Savills accepts house prices in the Midlands and North are already more vulnerable than those in Southern England, because buyers are "more reliant on mortgage finance and have lower levels of equity in their homes."

Ms Barnes also thinks the big lenders face an "interesting conundrum" in 2008 - "they will still want to lend, but their funds will be more expensive. We won't get mortgage rationing, but mortgages will cost more."

:: BOLTHOLE EARNS INCOME IN GARDEN

How many stressed business executives are dreaming of a sleepy bolthole in Scotland, with fishing rights on a stream in their garden and a stone built chalet in the grounds earning the cash to top up their pension?

Maybe not as many as you think, for Glasgow agents Strutt & Parker have been seeking a buyer for some months for Harperfield Lodge, sitting proudly on the banks of Douglas Water, near the market town of Lanark in the Clyde valley.

All on one level and recently renovated, stone-built Harperfield Lodge includes two bedrooms, sitting-dining room, and modernised kitchen. The chalet in the grounds, which looks snug in brochure pictures, can earn approximately £700 per month from holiday rentals.

Almost equidistant are Glasgow (35 miles) and Edinburgh (41), while Carlisle is 70 miles away down the nearby M74.

I'm surprised that no homeowner, cashing in their chips on homes in either Glasgow or Edinburgh, hasn't got their fishing rod out and headed for Harperfield. Can "offers sought in excess of £227,000" really have put them off?

INFORMATION: Strutt & Parker, Glasgow (0141 225 3880).

:: RESIDENTIAL AUCTION FACE CHALLENGE

In the last five years, the amount of money raised from residential property auctions has soared by 143% - from £1.59bn to £3.88bn, according to figures from Essential Information Group which monitors the sector.

Some of the biggest rises have been recorded by regional auctioneers: Newcastle-based Keith Pattinson has seen 651% growth from £14m in 2002 to £105.7m, while Bristol-based Maggs & Allen has soared 562% to £22m. Savills in Nottingham is up 483%, from £4.8m to £22m.

Kent-based Clive Emson claims to be growing faster than any regional player, and its next sale, beginning in Brighton on November 1, will be a guide of how investors are reacting to global financial worries.

It includes a five-storey building in St Leonards on Sea, Sussex, carved into four flats earning just under £16,000 a year (guide £250-280,000), and a three bedroom semi-detached house in Eastbourne needing care and attention (£120,00-140,000).

Emson's sale in Maidstone on November 2 includes a Grade II-listed farmhouse just outside Sandwich, Kent, which dates in part to the 17th century - stuffed with beams, inglenooks, panel doors, with separate annexe also needing refurbishment. The guide is £470,000-490,000.

Day three of the Emson sale, at Southampton's Rose Bowl on November 6, includes a former church hall in Portland, Dorset, with permission for conversion to two flats. Guide £150,000-160,000.

The latest Savills Residential sale in London on October 29 also includes properties rich in potential: an attractive mid-terrace house in South Norwood, South London, requiring modernisation is guided at £145,000, while a two bedroom first flat in Neasden, North London, has the makings of a convenient bolthole (£160,000-plus).

But how many bidders will have the nerve and funds to chase a splendid five bedroom home on a corner plot in Twickenham (£700,000-plus)? A Victorian mid-terrace house in New Cross, South London, earning £16,800 per year in rental income is guided at £300,000-plus.

Small builders might also rise to the challenge of Waldersea House, a Grade II-listed manor house with 4,600 sq ft of living space in a 1.5 acre plot near Wisbech, Cambridgeshire (£450,00-plus). Planning permission has been given for three four bedroom houses.

:: INFORMATION: Clive Emson (0845 850 0333); Savills (020 7824 9091).