'DON'T PANIC' CALL OVER MORTGAGES

"There will still be competitive deals there for people next year."

Mr Marks added: "Interest rates have climbed over the last two years, so payments are likely to increase for borrowers coming off low fixed rate deals. However, by historical standards, rates are still actually low. The outlook will also be helped by the latest cut in Bank base rate."

Mr Marks acknowledges many lenders are lifting arrangement fees on new loans - Newcastle BS itself, for instance, has a two year 'fix' at 4.89% for two years, with arrangement fee of 2.5% - that's £5,000 on a £200,000 loan.

"We have identified a demand for this sort of product where monthly repayments do not go up by much, and borrowers add an arrangement fee to their existing loan", says Steven Marks.

"But all speculation that house prices must fall because existing homeowners cannot get another mortgage is a bit overdone", he says. "Predictions of house price falls of 10%-20% are overdone too."

:: However Mr Marks himself faced criticism from Henry Pryor, founder of property aggregator Primemove.com, which combines over 1m properties from major property portals covering over 90% of all homes for sale.

"At this point in the market, lenders invariably try to pour oil on troubled waters", he says. "An awful lot of 1.5m borrowers nearing the end of a fixed rate mortgage face significant increases in outgoings."

Mr Pryor says some properties which rose in value by 20% in 2007 will only sell in 2008 if that rise is wiped off the asking price, and more besides to make them more affordable. Price falls of around 30% from the 2007 peak would compare with recessions of 1983 and 1989-93, he says.

:: IS THAMES GATEWAY SAILING INTO A SLUMP?

The problem of reconciling impressive Government targets with the vagaries of the housing market are underlined by latest new homes figures from the National HouseBuilding Council (NHBC).

NHBC says 51% of new homes started in England in the third quarter of the year were flats and maisonettes in line with Government demands to re-use urban 'brownfield' land previously built on.

But agents in centres like Leeds and Manchester admit the number of young professionals keen to buy is dwindling fast.

If investors vanish too, who will buy all these flats and maisonettes on completion in late-2008?

Something similar could be unfolding in Thames Gateway, the area stretching 40 miles eastwards from Canary Wharf in Docklands to the mouth of the Thames Estuary tipped as Britain's next great regeneration project.

The Prime Minister has boldly committed a £9bn infrastructure budget for a series of communities in Essex, Kent and South London intended to create 225,000 new jobs in the area and 160,000 new homes by 2016.

The scheme will become Britain's first eco-region, using large-scale development to pioneer environmental technologies and creating a zero carbon urban 'eco-quarter'.

However, Thames Gateway has a pretty downmarket image in housing terms; a report by the University of East London in autumn 2006 claimed 82% of all new properties built at that stage were one and two bedroomed flats with little attraction for families - even if they wanted to live there.

A new review of the region from agents Knight Frank is equally critical, claiming that:-

:: Transport spending is falling short: though Government boasts of spending £6bn over three years in Thames Gateway, the money did not go exclusively on transport.

If all current projects are to go ahead, including Crossrail and Thames Gateway Bridge, Government will have to more than double spending on transport alone, or find private investors ready to get involved for long-term returns.

:: £10bn Crossrail scheme runs late: this efficient East-West cross capital railway was intended to be ready for the 2012 London Olympics, but will miss that target by several years.

:: Bureaucracy and paperwork is stifling development: the value of residential development land is largely determined by terms dictated by Section 106 agreements, obliging developers to provide specific community facilities, which form the final part of planning application processes.

Knight Frank say these terms should be agreed at a much earlier stage.

:: Activity on many key sites has slowed to a "snail's pace".

Says Knight Frank: "Development sites including the Greenwich Peninsula, Barking Reach and Silvertown Quays have yet to start in earnest even though this time last year activity appeared to be on the increase."

:: Are the new homes any good? Knight Frank says developers have been cutting build costs to achieve higher profits, which "raises question marks over the quality and ultimately the sustainability of these developments."

Says Nick Parr, a member of Knight Frank's team in Thames Gateway: "The area has great potential, with the 2012 Olympics and new Eurostar services to France as vital catalysts, but everything is tied up in red tape. Dates for key developments, like Crossrail, are constantly put back."

In November, a Commons public accounts committee said the regeneration amounted to "little more than a group of disjointed projects."

Sittingbourne and Sheppey MP Derek Wyatt expressed a fear Thames Gateway could re-run the high-rise housing disasters of the 1960s. Last week (December 13), the chief executive of Thames Gateway suddenly left her job.

Even if officials eventually get their act together, Thames Gateway looks a sitting duck if housing demand were to fall drastically in 2008/9: it has a weak image, and appeals only to a few sectors of the market.

However, some investors still seem ready to bet on long-term success: agents Hamptons International claim 70 sales at a 334-unit scheme by Byrne Estates of "two iconic glass towers" in the former Chatham Dockyard in Kent's Medway Towns, with spectacular views across Chatham Marina and the River Medway estuary.

Studios start at £160,000, one bedroomed flats from £200,000 and two bedders from £265,000. Both £1,000 reservation fee and 10% deposit are non-refundable if buyers pull out before first units are ready in December 2008.

Hamptons say 42 buyers have exchanged contracts so far. Obviously, there are still some intrepid investors out there, despite all the "doomsday" warnings.

Trevor Nicholson, of agents CBRE-Hamptons, a joint venture to sell new homes, believes perceptions of Thames Gateway will changed when major housing projects get under way.

These include 10,000 homes planned around Ebbsfleet Station by Land Securities in a ten year project, plus 600 homes in Gravesend Heritage Quarter and a further scheme at Rochester Riverside which could start building within a year.

"At the moment, the general public has no clear idea what Thames Gateway means", says Nicholson. "Getting across the right image takes time, but major plans are afoot - for instance, there will be more office space around Ebbsfleet than there is at Canary Wharf."

:: INFORMATION: Hamptons International (01732 468 088); Knight Frank Residential (020 7473 6820).

:: WILL AGENTS CHECK INTO TESCO?

It's a grim Christmas for estate agents with some firms said to slashing staff numbers by up to 30% as the market shrinks.

But some fleet-footed agency staff could jump into the arms of Britain's biggest retailer, for Tesco apparently plans a low-cost, online estate agency service next year.

It would follow an unsuccessful attempt to enter the market with a £199 package for private sellers last summer.

That scheme fell foul of the rules because it invited owners to describe their own homes and was outside the Trade Descriptions Act, the Ombudsman scheme for complaints and other legislation applied to fully-fledged agents.

Now, it seems, Tesco will drop its attempt to help private sellers - barely 2% of the total market anyway - to offer a fuller, low-cost service to trim fees for selling an average home from £2,600 to around £1,000.

Properties will still be advertised online, but Tesco staff will take particulars, write property details and handle negotiations, possibly using call centre staff rather than locals.

It is hard to imagine Tesco gate-crashing the sector at a more vulnerable moment for agents. If it succeeds, it could trigger a fearsome war on commissions.