ARE PRICE FALLS BEING EXAGGERATED?

"Acting for a buyer on a new home in a South Manchester suburb where advertised prices were £230,000-plus, we actually managed to buy at £179,000. But builders won't publicly ever admit to those sort of discounts.

"Another buoyant sector is Sale and Rent Back; owners under pressure sell for possibly 20% below market value, to spend some of the equity they have built up and stay on as tenants.

"Investors like the discount plus a tenant in place when they take over."

Law thinks a shrewd investment is a quality semi-detached house in an attractive suburb, with three or four bedrooms, in the £150,000-£300,000 bracket.

"So many people want to rent that gross yields are approaching 9%, against 5.5% not long ago before mortgage repayments are taken into account."

Asset wants interest rates cut soon to nip economic slowdown "in the bud".

However, other market surveys paint a grimmer picture- which has ratcheted up pressure on the Government to take emergency action.

Lucian Cook in the research department at London and country house agents Savills questions the Asset theory.

"I agree that the people who find it most difficult to get mortgages have the smallest amounts of equity," he says.

"However, it is wrong to assume prime markets are not feeling the downturn. Our London indices suggest that up to the half-year point, prices for prime property have fallen back 9% since the peak; in the country, prime has fallen back 5%, because it took slightly longer to filter through.

"In the second quarter of 2008, our index showed annual falls of nearly 4% in the £500,000-1m bracket; of 5% in £1-2m; and of 3% above £2m.

"Only in the £4m-plus bracket was there a price rise, of just under 1% because there is scarcity of supply and people are still prepared to pay for quality. Across all price bands, those properties holding their value are those which are the best of their type."

Hometrack, another housing data specialist, says homes sold in August for an average 90.7% of the asking price. But it reckons the annual drop is still only running at 5.3%, half the Nationwide BS figure.

Perhaps the most optimistic gloss which Hometrack's Director of Research Richard Donnell can put on the current situation is this. "We may well start to see a moderation in the rate of monthly price falls.

"With ever growing uncertainty among households over the broader economic outlook, the current re-pricing of housing still has some way to run," says Donnell.

At the Capital Economics consultancy, property economist Seema Shah denies there is a wide variation in figures for the fall so far.

"It is down to the fact that Land Registry figures measure house prices at the completion stage. Therefore they will lag other house price indices, such as Nationwide, which measure house prices much earlier in the housebuying process," she says.

OWNERS MIGHT HIDE PROBLEMS TO SECURE A SALE

Almost a quarter of sellers admit to having lied about, or deliberately covered up, problems with their property to make it more appealing to prospective buyers, says a survey from Homeserve, the UK's national home emergency service.

Sellers are most likely (about one in 12) to lie about heating problems or the age of their boiler. A similar proportion conceal parking problems in their area and keep schtum about nightmare neighbours.

Around 6% of vendors admit concealing cracks in their walls, while 5% temporarily patch up leaking roofs, and 3% omit to mention they share their homes with pests such as mice.

Lies may be costly to sort out when new owners move in.

On average solving boiler/heating problems costs £1,064; cracks in the wall cost an average £1,412, dampness costs £1,334 to put right and pests easily trigger an average £193 bill, says Homeserve.

In some cases, buyers could arrange surveys to assess potential problems - for example stemming from dampness and possible dry rot - at little or no cost.

Fewer than 10% of buyers bother to arrange private surveys before they go ahead and buy.

AUCTION GUIDE PRICES GO LOWER TO BOOST INTEREST

Parents of university-bound children might join the bidding at Countrywide Property Auctions fixed for Manchester, Leeds, London, Birmingham and Bristol in September if they want to snaffle a city centre 'crashpad' to avoid the high costs of halls of residence or a private sector rental.

Some shrewd bidders could secure homes close to these major conurbations for little over £50,000 at one of these sales judging by guide prices detailed in the Countrywide brochure.

Essential Group, which compiles a national audit of auction results, shows the auction sales conversion rate rising slightly to 56% in July, against 53% in June.

David Sandemann at Essential Group says the July figures are based on a small sample of sales. Only September figures due in early October will show if the trend is heading back toward the 70%-plus sales rate maintained until summer 2007.

Since then, buyers have become much warier about committing themselves.

Countrywide's Manchester sale includes a two-bedroom house in Sedley Street, Liverpool, with windows boarded up (guide £30,000); a three-bedroom detached cottage in Colwyn Bay, North Wales (£60,000-plus); and a one-bedroom ground floor flat in a purpose built block in Horwich, Bolton (£50,000).

The Leeds sale includes a recently built one-bedroom flat in Millsands, Sheffield (£65,000-70,000); a three/four-bedroom modern flat in Belle Vue Road, Leeds (£50,000-60,000) and a two/three-bedroom two-storey apartment in an impressive conversion in High Street, Heckmondwike, West Yorkshire (£60,000-65,000).

The London sale includes a wide selection of two-bedroom purpose-built modern flats in Maritime House, Greens End, South London (£130,000-145,000) presumably offered either by the original developer or as repossessions from buy-to-let investors who've rapidly come unstuck.

:: INFORMATION: Countrywide Property Auction (0870 240 1140 and www.countrywidepropertyauctions.co.uk).

LANDLORDS MAY HAVE CASHED IN ON TAX REFORM

Landlords who sold their investment properties in the first quarter of 2008 might be kicking themselves because recent reforms of Capital Gains Tax have slashed the amount due to the taxman when they sell up and take profits.

A survey by leading buy-to-let lender The Mortgage Works says landlords selling a £200,000 house or flat in the first quarter after five years of ownership faced a CGT charge of £30,597 on houses and £30,241 on flats.

Landlords selling similar properties in the second quarter, after the new CGT regime took effect, faced much smaller tax bills of just £16,581 and £15,975 respectively.

However, landlords might have found it much harder to sell, and may well have agreed a lower selling price, if they delayed their sale into the second quarter.

Andy McQueen of The Mortgage Works says although buy-to-let has been impacted by the credit crunch, landlords continue to buy and sell on a regular basis. "This has resulted in buy-to-let forming a higher proportion of net lending than previously seen in the mortgage market.

"Landlords outside London and the South-East experienced considerable price increases between 2003 and 2008 and subsequently made substantial returns on their investment," McQueen says.

"However, with these returns came large tax burdens and it is clear that those who waited to sell in the second quarter of 2008, instead of quarter one, really saw the benefit of the Government's CGT reform."

The Mortgage Works, a subsidiary of Nationwide BS, has recently unveiled a range of 19 products for buy-to-let investors, including a two-year fix at 5.09%, to a maximum Loan-to-Value (LTV) of 60% with an arrangement fee of 3.75% of sum borrowed. Applicants can opt to pay either a lower rate or a higher arrangement fee.

Nationwide has about 20% of its assets outside mainstream residential lending. Its other buy-to-let brand is UCB Home Loans.

:: INFORMATION: The Mortgage Works (0845 4545 800).

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