CRISIS OF CONFIDENCE THE BIG THREAT TO PROPERTY MARKET

"A failure on their part could have very serious consequences for the national housing market and economy in general."

Her remarks follow the warning from Mervyn King, Governor of the Bank of England that "we should not cry gloom and doom" when he was invited to comment on suggestions from a Bank official that house prices could sink by a third by 2010.

There's a clearly a view that the housing market could be hammered by excessive pessimism, leading to widespread job cuts, following intense media coverage which might suggest things are worse than they actually are.

The dangers of painting an over-gloomy picture of the market were underlined by end-April figures from Nationwide BS showing a 1.1% fall in house prices during the month, and the first year-on-year fall in house prices since March 1996.

That triggered a new wave of alarming scenarios, yet Nationwide points out that about 5.5m borrowers on fixed rate deals will have seen no change at all on their mortgage rate so far this year.

Another 3.1m borrowers on tracker rate loans - about 27% of the total - have benefited from the 0.75% fall in Bank base rate since December.

Says Nationwide BS: "Overall, some groups of borrowers will certainly feel the effects of higher mortgage rates, but around 85% of borrowers will be seeing no impact or will benefit directly from reductions in Bank base rate this year."

It admitted that the only ones likely to feel pain during 2008 are the 1.4m homeowners ending cheap fixed rate deals - and a further 400,000 ending tracker and discounted deals during the year.

Expiring deals account for barely 15% of all outstanding mortgages.

National Association of Estate Agents (NAEA) chief executive Peter Bolton King says: "Overall a 1% drop is a tiny proportion of the rises in prices seen in recent years, and is certainly not enough to throw many people into negative equity as we saw in the early 1990s.

"People should look to local markets to get a true picture.

"But it is important to remember the underlying factors which support the property market remain in place: low unemployment, historically low interest rates and pent-up demand for houses."

:: HOW TO BUY A HOME AFTER DIVORCE

Divorcing couples usually want to get rid of their marital home as soon as possible, says the director of a leading househunting agency who urges them to think hard about their next property purchase - and buy a dog.

"With no dependants or commitments to consider, total freedom can be daunting rather than liberating," says Bill Spreckley, regional director of Stacks Property Search & Acquisitions.

Spreckley urges "new singles" to make their social lives (and potentially, their love lives) a priority.

"Living in a remote spot or a small rural village is fine if you are happily married but they can be lonely locations if you live alone or with young children," he says.

He thinks the ideal community is "somewhere large enough to provide a range of facilities and individuals. Big towns and cities can be very impersonal; market towns can look ideal but may turn out to be retirement hotspots.

"Large villages may be the best option - especially if they have shops, pubs, cafes and plenty of societies, clubs and other community gatherings."

Mr Spreckley gives this checklist:

:: Find a place where you can pursue your interests. "Sports, am-dram, local choir - force yourself to join as much as you can, as long as you have a general interest."

:: Is there a welcoming pub or cafe that you can visit comfortably by yourself?

:: Check the statistics - websites like upmystreet.com give an idea of the average age of residents.

:: While a large town may not be the ideal place to live, having one nearby offers back-up facilities and easy access to entertainment.

:: Online dating may be a terrifying proposition, but easy access to a city reduces your carbon footprint and increases the chances of a rich seam of potential partners.

:: If you have children, try to find a community which suits their social needs too.

:: Get a dog and take it for walks - it's one of the least pressured and best ways of striking up new friendships.

INFORMATION: Stacks Property Search & Acquisitions (01594 842 880) has 17 offices across the UK.

:: CAN TESCO CRACK THE AGENCY MARKET?

It looks as though Tesco has had second thoughts about the foothold it wanted to establish in the housing market.

After being blocked by the Office of Fair Trading (OFT) in October 2007 from offering a service within its stores to private sellers for a flat fee of £199, Tesco has decided to sell its property website to the leading High Street estate agency Spicerhaart, which has 300 offices across the UK trading under well-established names like Haart, Felicity J Lord, Spicer McColl, Darlows and Baileys.

Spicerhaart chief executive Paul Smith says: "We are developing a new innovative virtual estate agency business in partnership with Tesco, who will be our main distribution partner."

Spicerhaart says the new service could be up and running in early 2009. Tesco, Smith says, will be "the main distribution partner."

Rival agents, for the moment at least, seem underwhelmed by the latest move from the giant retailer.

Says Trevor Kent, with a one-branch agency in Gerrards Cross, Bucks: "Tesco is certainly a virtual estate agency, because it has never actually traded as an estate agent. I always expected their estate agency would operate in their own stores, perhaps next door to the butcher's counter.

"Now it obviously won't. But if Spicerhaart wanted to operate an online estate agency, you would think they could do it without needing any help from Tesco.

"Bearing in mind the current state of the market, they couldn't have chosen a worse time to get involved. Let's hope Tesco has everything planned a bit better than the railway tunnel which it tried to build in Gerrards Cross, which collapsed on top of them."

:: DEMAND WEAKENS AUCTION ROOM SALES

The success rate achieved by auctioneers has shown a marked drop within the past three weeks, says Mark Tanton at Countrywide Property Auctions which completed a series of sales in April from London to the North of England.

"In the last series of sales, we sold 85 properties out of 148 bringing in nearly £9.5m," he says. "Success rate ranged from 50% in Manchester and London to 61% in Birmingham and 71% in Leeds.

"Publicity about problems in the US is denting confidence," he says, "as is the increased difficulty in acquiring a mortgage and speculation among dealers as to whether the market has reached rock bottom."

Tanton says sellers increasingly accept guidance to aim for realistic prices - or revise their thoughts quickly to achieve post-auction sales.

Latest figures from Essential Information Group, which monitors results across the UK, says the overall auction sales rate slipped to 63% during March, from 71% in February.

Only 42% of residential lots offered in the North-East was sold, while London sales achieved 77%, the South-East nearly 73%, the South-West 60% and the North-West 74%.

Says Graham Barton at Westcountry Property Auctions, with sales in Redruth (May 14) and Plymouth (May 15): "Although the market has changed materially in the last six or seven weeks, there is still an enthusiasm to buy: we now have three or four bidders chasing each property, against 10 a few months back.

"Buy to let investors need a 20% deposit to be seriously in contention, but there is strong interest in properties showing gross income of around 10%."

The Westcountry sale includes a nearly-new purpose-built student apartment in Plymouth, currently guided at £40,000-plus, which generates steady income approaching £5,000 per year.

Similarly an Indian restaurant in the heart of Redruth, Cornwall, with a flat above occupied by restaurant staff, promises annual rental income of £15,000 against an auction guide of £140,000-plus.

A Grade II-listed cottage in Falmouth (£110,000-plus) might be viewed as a longterm investment - because a sitting tenant on a regulated tenancy paying nearly £4,700 a year could hold the fort for most of the next 30 years.

By contrast, a two-bedroom, two-bathroom cottage in need of renovation at Grampound, between Truro and St Austell, is a former regulated tenancy which has finally become vacant, with a guide of £145,000-plus.

Some 21 acres of stunning woodland at Carbis Bay, near St Ives, is likely to attract interest at £185,000-plus, though the permission for a mobile home enjoyed by the present owner might need to be renewed. Those seeking a weekend bolthole might head for the village of Pendeen, near the National Trust cliffside on the North Cornwall coast, for a property which could become a snug two-bedroom home (£65,000-plus).

Savills' next London sale on May 12 includes a first floor self-contained flat in a cobbled mews in Kensington (£325,000-plus); a pair of huge semi-detached houses with a total 6,500 sq ft of living space being sold by the local council (£1.75m); and a two-bedroom flat in a local authority block close to shops and station in Charlton, South-East London, guided at £115,000-plus.

INFORMATION: Savills (0207 824 9091); Westcountry Property Auctions (0870 2414 343); Countrywide Property Auctions (01245 344 133); Essential Information Group (01737 226 150).