CODE OF CONDUCT FOR SALE-AND-RENTBACK

Says Mr Watters: "Where owners have remortgaged in the past to take as much cash as they can out of property, they may face real difficulties if fixed rate mortgages become more expensive.

"But Sale-and-Rentback is a very important financial decision which should regulated, in the same way as mortgages."

A Quick Sale launched its Tenancy Agreement last autumn - promising an Assured Shorthold tenancy for an agreed period (typically five years). The agreement also guarantees that rents will not rise ahead of market rates.

However, official figures on rent levels - which have shown a rise in recent months - aren't always borne out in the market place. Many landlords have seen minimal rises recently, because some areas have a glut of property to rent.

Owners thinking of selling up should reflect that they might struggle to get back into owner occupation at a later date - because prices are expected to rise steadily on a longer term view.

But by selling, some owners feel more in control of their situation - and may avoid having to move, a vital factor if children are settled in school. Repossession, by contrast, creates upheaval and uncertainty for families over many months.

A franchise with A Quick Sale costs an initial £30,000-£40,000.

:: INFORMATION: PROBAS (0845 094 8955 and www.probas.org); A Quick Sale (0800 328 8239 and www.a-quick-sale.co.uk).

:: FOREST LODGES OFFER NEW INVESTMENT

Growing demand for 'green' family holidays which don't involve air travel should enhance the investment attraction of luxury log cabins in Britain's best-established holiday areas.

On the eastern shores of Loch Lomond in the Scottish Highlands, Lodge 29 in the picturesque village of Rowardennan, with Loch Lomond and Trossachs National Parks on the doorstep, is a snug bolthole built in pine sleeping six to eight people.

Its sitting room/dining area offers superb views across the loch, and decking to the front and side of the lodge includes a Canadian hot tub.

Walkers have the West Highland Way passing through the village, while an annual fee secures a boat mooring. The city lights of Glasgow are 28 miles to the south.

Suggested weekly rental rates or £300-£600 per week - try a Google search of "lodges at Rowardennan" should adequately cover the £880 annual service charge.

Agents Strutt & Parker seek offers above £195,000. Can the next owner can do as well as the one checking out?

The same agent lists another interesting Scottish holiday home - a white rendered, slate-roofed terraced cottage in the idyllic sailing village of Craobh Haven on the Craignish peninsula on the west coast of Argyll and Bute.

The marina, developed from a perfect natural harbour, has berths for up to 250 vessels - with a fine selection of West Coast sea lochs, islands and sheltered anchorages within easy reach.

Strutt & Parker invite offers above £170,000. If holiday homes meet criteria set down by the taxman - available for letting at least 70 days per year - losses incurred can usually be set against an owner's main income.

:: INFORMATION: Strutt & Parker, Glasgow (01412 253 880 and www.struttandparker.com). Tour operator Hoseasons operates The Lodge Collection, a selection of wooden holiday homes around the country, including Loch Lomond. See www.hoseasons.co.uk/lodges

:: TAX CHANGE WILL WORRY SECOND HOME OWNERS

Second homeowners have been calculating their liability to Capital Gains Tax (CGT) in the light of tax changes due on April 6.

David Lawrenson, buy-to-let expert and author of the new edition of Successful Property Letting, claims higher rate taxpayers who have held a property for less than three years will have most to gain from a quick sale: CGT chargeable on profits plunging from 40% to 18%.

If they have no other capital gains, investors get the first £9,200 of any profits free of CGT anyway. So couples jointly owning property avoid tax altogether on the first £18,400 of any gain.

However, longer-term owners of second homes could face significantly larger tax bills on their gains- because they lose the right to claim indexation in line with inflation up to 1998 and taper relief which has cut the tax charged on asset sales the longer they have been owned.

Maybe that's why Stephen Ludlow at London agents Ludlow Thompson, with 10 offices around the capital, predicts that rising rents - partly because tenants are delaying purchases in uncertain times - will persuade most landlords to sit tight.

"If they consider the yield they are getting against purchase price, rather than current value, most landlords are doing well," he says.

"The saving on CGT is certainly not as generous as it first appears; under taper relief, the lowest tax rate on profits on an investment property is only 23%. Landlords won't be too excited by a chance to cut the tax bill by a further 5%."

Stephen Ludlow thinks stamp duty and legal fees make it unlikely landlords will jump in and out of the market as tax rates vary.

"If anything, the letting market is setting the dynamic of the housing market," he says. "There is little feelgood factor for investors, and with shares all over the place, most landlords will stay where they are."

Ludlow says buy-to-let is constantly seen as a weak link in the market: "In blips after 9/11 in 2001 and again in 2004, it was actually stronger than the mainstream market."

In his book, David Lawrenson maintains further investment in property in 2008 can still work - particularly on BMV (Below Market Value) deals.

He says some buyers leaflet certain streets, offering rapid cash to owners for a fast sale below full market value. After raising a bridging loan to buy, some buyers manage to remortgage at full market value - to get "instant equity" in a property.

Says Lawrenson: "Everybody is currently spooked by the media about prospects for bricks and mortar.

"In fact, rents are rising, tenant demand is strong, and buyers with 25% cash deposits gets a home today for less than they would have paid a year ago.

"Most buyers are not stretched as badly as they were in 1989/94, and won't be unless unemployment takes off. Many landlords have gearings under 50% (total loans less than half portfolio value) and I still see potential in buying family homes at £160,000 outside London which earn rental income of more than £600 per month."

:: INFORMATION: Successful Property Letting: How To Make Money In Buy-to-Let by David Lawrenson (Elliot Right Way paperback) costs £9.99.

:: SALES OF NEW HOMES HIT BY LOWER VALUATIONS

Many new home purchases are collapsing because of down valuations - when valuers put a lower value on a home than the builder wants.

That's the warning in February's Housing Market Report (HMR) from the Home Builders Federation (HBF) which says that flats in some inner city and town centre locations "appear particularly vulnerable to the current downturn in demand and tighter lending conditions".

The report says the seasonal downturn in housing demand in November and December was "especially sharp" - leading to a stepping up of sales incentives, in an effort to shore up asking prices around Christmas-time.

Tighter lending controls are now a bigger deterrent to sales than mortgage rates - and the down valuation problems sink many sales already agreed. Tighter lending criteria are also causing many deals to collapse.

And even though land price inflation has eased significantly, the HMR says that planning delays are another serious constraint on production. Since their peak in April 2007, share prices of major builders have plunged 49.4% - and the fall might not be over yet.

The HMR findings are in line with a recent analysis of the new homes market in Building magazine which claimed: "For developers of flats outside the capital, the market has disappeared, along with the buy-to-let investor."

Building magazine claimed that for every 1% drop in house prices, builders could see profits fall by 6%-7%. That's why developers try so hard to avoid obvious price cuts.

But once a home is built, builders must find buyers - fast. That could mean "loss leader" prices on early sales in many blocks, to catch the eye of buyers and investors.

However, the HMP says a small majority of builders - plus 85% - remains confident that sales of new homes will rise in 2008, against 2007.

ends