MASSIVE REDUCTIONS ON AUCTIONED REPOSSESSIONS

The Essential figures record a one-bedroom flat in Thamesmead, South London, sold for £297,995 in December 2005. Under the hammer with agents Harman Healy in August this year, it fetched just £120,000.

Two other one-bedroom apartments in Gotts Road, Leeds, which sold in August 2005 for £170,000 and £197,000 respectively, were eventually knocked down for £95,000 and £81,000.

Since the start of 2008, Sandeman says records suggest that 1,129 new-build flats have been sold in auctions since the start of the year - and there is little sign so far that their values are levelling off.

In its brochure for sales in October-November. Countrywide Property Auctions lists several homes sold for much higher prices just a few years back.

Countrywide's Manchester sale at Haydock Park Racecourse on October 23 includes a two-bedroom ground-floor flat in Tyldesley, Manchester, guided at £55,000-plus.

In December 2004, Land Registry records show it was initially sold for £90,000.

In the same sale, a two-bedroom, four-floor waterside apartment in Salford, Manchester is guided at £100,000- 110,000. It sold in June 2004 for £182,000.

In the Nautica development on the Waterfront in Selby, Yorkshire, a two-bedroom flat going under the hammer in Leeds on October 24 is guided at £70,000. In December 2006, just 22 months ago, Land Registry records show it sold for £159,995.

In Webb's Factory, a conversion in central Northampton, a two-bedroom apartment in a warehouse due to be sold in the Countrywide Birmingham sale on October 29, has a guide of £100,000. It was purchased in December 2002 for £148,000.

All these figures suggest there were numerous exceptions to the booming property figures which the leading lenders published since 2000 - many properties were plainly losing value throughout that time.

The eventual reckoning for people who were persuaded by builders and other 'experts' to buy them could be grim.

"Some lenders deal with this situation by becoming receivers in rents - a good proportion of the mortgage repayment can be covered by rent which they collect," says Ray Boulger at leading broker John Charcol.

"But if the borrower cannot repay the loan when a property is sold, the debt remains due to the lender unless a borrower goes bankrupt to get the debt written off.

"Lenders can pursue people for up to 12 years for money owed, although the Council of Mortgage Lenders has indicated that lenders should not maintain the chase beyond six years.

"What tended to happen in the early 1990s was that lenders tended to take the pragmatic view. If borrowers quickly agree to repay a reasonable amount, many lenders take it and write the rest off."

:: A former public toilet on two levels in Fulham with a total floor space around 450 sq ft poses a challenge for any developer prepared to pay upwards of £90,000 in the next Savills Residential Auction on October 27.

Although most of the space is at basement level, Savills says the solid, stone building is "suitable for conversion to a variety of uses - subject to obtaining the usual consents".

The sale also includes: a two-bedroom first-floor flat in Sutton, Surrey, requiring modernisation (guide price £125,000-plus); a two-bedroom Peabody Buildings flat in London's Bloomsbury (£285,000); and a one-bedroom flat above a shop in Norbury, South London, with 75 years left on the lease (£70,000-plus).

Would-be investors might also be tempted by a three-bedroom mid-terrace house in Dover, Kent, open to bids from £60,000.

:: INFORMATION: Countrywide Property Auctions (0870 240 1140) are in Haydock Park Racecourse, Merseyside on Oct 23, the John Charles Centre for Sport in Leeds on Oct 24, The Park Inn Hotel, Birmingham, on Oct 29, Bristol Zoo Gardens on Oct 30, London's New Connaught Rooms on Nov 4 and in Llandudno, North Wales on Nov 14.

Essential Information Group (0173 723 2289); Savills Residential Auctions (0207 824 9091).

:: WILL BANK NATIONALISATIONS PROP UP HOUSING MARKET?

Although the Government's massive £37 billion cash injection into Royal Bank of Scotland and HBOS is intended to prop up share prices and save the stock market from further agony, it could have big implications for the housing market too.

As part of the deal, the banks agreed that borrowers will be able to get competitive mortgages, priced at 2007 levels, for the next three years - and also to establish support schemes for those struggling with mortgage repayments.

There certainly will be more money available for mortgages, but the big question is whether anybody will want it when medium-term prospects remain so gloomy.

"HBOS will have to increase lending and they will have to be competitive to achieve a certain level of funding," says Ray Boulger at leading mortgage broker John Charcol.

"Given the deal, the general LIBOR market (the rate at which banks lend to each other) should improve and so other lenders will also begin to lend again, so competition may reappear."

However, Boulger fears that 95% loan-to-value (LTV) mortgages will be scarce for the rest of 2008 - but that lenders may have to exceed a current 90% limit on advances in 2009 if they can't find enough borrowers keen to take the extra money pumped into the system.

"There will be a boost to confidence in the housing market if there is an increased availability of mortgages and rates steadily reduce," he says.

"Assuming this bailout is successful, I see more buyers nibbling from early 2009 and possibly prices stabilising by mid-2009, when a bit more optimism will have returned."

However Seema Shah, property economist at Capital Economist, is less impressed.

"We retain our prediction of a 35% drop in prices from peak to trough, and the trough is likely to arrive at the end of 2009," she says.

"The bank rescue is obviously positive, but the state of the economy will be the decisive influence on housing markets in the next 18 months. Even if the supply of money improves, we see mortgage demand staying weak through 2009 as house prices continue to fall, the economy weakens and unemployment rises."

Housing expert Henry Pryor says: "In theory, the Government package is what the housing market needed, but the market moves a bit like a supertanker and I see no likely impact on its current direction until at least early 2009.

"In 2009, the market should start to free up. At the moment, the big problem is the level of transactions, which are down by up to 70% on 2006 figures.

"This time next year, I believe prices will have finally stabilised, probably by around 43% down from the peak in some places."

However, the maverick estate agent Trevor Kent, based in Gerrards Cross, Buckinghamshire, thinks recent days of banking panic could induce a subtle change in the way we see bricks and mortar.

"I believe there will be a slow realisation among people who have been dragging money out of various savings institutions that although property can drop in value, it usually keeps the rain off your head.

"Stocks and shares don't do that, and I believe that many who have gone into cash might gradually come around to the idea of investing in something tangible."

Kent also thinks the latest Housing Minister, Margaret Beckett, is enough of an 'old stager' to see the potential risks inherent in the January 1 deadline to force all homeowners to have a completed Home Information Pack (HIP) ready on the day a home goes on sale.

"When the public realises that it could be three or four weeks before they are legally allowed to put their own home on sale because of this latest piece of Labour red tape, it could cause an outcry," he says.

"I think Mrs Beckett's long years of experience might send her a message and that she will maintain the status quo, by which owners merely need to have ordered a HIP when their home is marketed by an agent."

ends