CREDIT CRUNCH COULD FREE UP LAND FOR SELF-BUILDERS

Stevens says: "The estate agents Savills said recently that land prices had fallen 37% in 12 months. Individual plots are probably down 10-30%.

"At the peak of the market, good plots in southern England cost £400,000. Today, they fetch £200,000-300,000."

In the Outer Hebrides, Stevens says it is still possible to find a plot for £20,000.

He says volume builders work on the assumption that the price of a house is one third land cost, one third building cost and one third profit. Self-builders avoid the final third, and have the satisfaction of meeting a formidable challenge.

The NSBA says plots have become so rare in popular parts of Britain that many self-builders have to buy an older property and then clear the site.

Critics of the NSBA plan might argue that self-builders rarely chase land in locations like Thames Gateway, where hundreds of acres are earmarked for new communities. Self-builders usually prefer smaller, self-contained locations near existing urban centres - but they often combine into small groups to handle developments of 10-20 homes in one community.

Stevens acknowledges he has his own axe to grind: he's publisher of Build It magazine, a leading publication for self-builders with a 16,500 monthly circulation after a revamp in October 2008.

:: INFORMATION: 'Self-build As A Volume Housing Solution' from the NSBA is available on www.nasba.org.uk.

:: WHY REPOSSESSIONS COULD TOP 75,000 PER YEAR

An accelerating loss of jobs across many areas of the economy could see unemployment hit 11% over the next few years - causing a sharp rise in mortgage arrears and a "record high" of repossessions.

That's the view of a Capital Economics analysis comparing today's slump with those in the past. It predicts: "The next few years are likely to be more like the early 1990s than the 1970s or 1980s.

"With about 40% of households being mortgage holders, about 680,000 homeowners could fall into mortgage arrears in the next couple of years, almost double the early 1990s highs."

Capital Economics thinks sub-prime mortgages, which triggered the crisis in the US, cover 6-8% of total mortgages in the UK. About 180,000 mortgages of 4.5m advanced in the last two years went to buyers with 'impaired credit'.

But if self-certification mortgages for those with irregular income are added, around 360,000 sub-prime mortgages were probably approved in the last two years alone.

Feasibly, around one in 23 borrowers - about 500,000 - could default before long on their mortgage. By December 2010, arrears (six months and more) could affect around 450,000 homes.

Specific Government measures could help borrowers in trouble: changes to the Income Support for Mortgage Interest (ISMI) scheme effective from April 2009 means the waiting period for State support falls from 39 weeks to 13, and the maximum value of eligible mortgages is raised to £200,000.

But Capital Economics says: "While more borrowers are covered by Mortgage Payment Protection Insurance (MPPI), state support is less generous. It is not clear whether, overall, mortgage safety nets are more generous than in the early 1990s."

Government also wants to defer mortgage interest payments for up to two years when arrears are caused by loss of income, sickness or redundancy. The scheme could apply to loans up to £400,000.

However, Capital Economics reckons Government rescue schemes might help only 15,000 of the total 450,000 in trouble.

It concludes: "Although the intense political pressure to limit possessions makes it impossible to predict exactly how far repossession will rise, we suspect they will match or even surpass the early-1990s peak of 75,500."

:: OWNER OCCUPIERS ARE SQUEEZED OUT OF AUCTIONS

Although the value of homes selling in the auction room is falling as more repossessions go under the hammer, owner occupiers need deposits of 30-40% of selling price to get one.

That's the warning from David Sandeman, managing director of Essential Information Group (EIG) which collates details of all auction sales around Britain.

"The market is currently dominated by professional and cash-rich investors", says Sandeman.

"Getting a mortgage promise is a complex business, and with successful bidders needing 10% deposits when they buy, they need up to 40% of the price in cash to compete with other bidders."

The new EIG figures show a sharp decline in the value of commercial property lots sold: receipts totalled £898m in 2008, 54% down on the £1.9bn achieved in 2007.

Residential sales under the hammer in December 2008 also raised less cash- because many lots were cheaper. While the number of home sales in December 2008 was down just 3% on December 2007, receipts from housing sales shrank from £287m to £214.3m.

Total residential property auction sales for 2008 topped £2.6bn.

However, Sandeman says the overall sales rate in December 2008 sales held firm at 67%, the same as November - suggesting vendors and purchasers are happy with price levels in the auction room.

And for the first time since February 2008, says Sandeman, every region saw at least 50% of its lots sell at auction. Every region topped 60%, with the exception of the North East (57%).

Biggest auctioneers, on a regional basis, are:

East Anglia: Auction House Norfolk and North Suffolk (£19.2m sales in 2008).

East Midlands : Graham Penny (£36.5m).

London : Allsop Residential (£388m).

North East: Pattinson Property Auctions (£92.4m).

North West: Pugh & Co Commercial (£48m).

NW Home Counties: Romans (£24.4m).

Scotland: SVA Property Auctions (£8m).

SE Home Counties: Clive Emson (£87m).

South West : Westcountry Property Auctions (£29.8m).

Wales: Paul Fosh Auctions (£21.3m).

West Midlands: Cottons (£30.4m).

Yorks & Humber: Eddison Leeds (£50.8m).

:: INFORMATION: Essential Information Group (01737 226150 and www.eigroup.co.uk).

:: OVERSEAS BUYERS READY TO HUNT CHARACTER HOMES IN UK

Wealthy buyers with money outside Britain are ready to take advantage of the weak pound and falling prices to buy 'character' properties in areas which include Devon, Yorkshire, and Bath, besides Central London, says an agency which finds suitable homes for buyers.

Jonathan Haward at Truro-based County Homesearch says: "If you are an international executive paid in dollars, your buying power in Britain is up by 20%.

"Couple that with price falls of 20%, and you can see why buyers abroad see a good moment to buy into the UK market.

"Typically they want apartments in Bath, which they and their friends will use on visits - which is likely to prove a sound investment over the longer term".

Haward says expats are like British customers lured by huge Marks & Spencer price cuts: "They find things which are not exactly what they had in mind, but at current prices, they happily go ahead."

Haward says this interest focusses on homes in local building styles, in the £300,000-500,000 bracket. He is negotiating the purchase of a large apartment in a Bath period house around £375,000.

"In some cases, these are the sort of buyers who went to Dubai a decade ago to lock in for the long term", he says. "They recognise that if the pound rises against the dollar, as many expect, then a property purchase could yield currency benefits too."

Haward says: "Buyers who have no need of a mortgage can rely on us to negotiate some real bargains. Even if house prices dip another 5-10%, we can see some excellent house price growth starting in 2010.

"Five years from now, today's buyer will be sitting on a substantial profit."

In Central London, Nathalie Hirst, director at Prime Purchase, has instructions from several European clients keen to invest in the capital.

Hirst says buyers can find luxury flats around £1.5m which would have peaked in 2007 at £2.8m.

"It's a great opportunity for euro-rich buyers and we have been busy with buyers from existing international clients and also from French, Italian and German buyers wanting to see what they can buy", she says.

Two leading agents confirm prices have crashed in the capital.

Knight Frank's Central London Index says £1m-2.5m homes are hardest hit, with price falls up to 22%. While price falls are slowing, Knight Frank thinks the peak-to-trough falls could be 30% before the market finds a level.

Cluttons says Central London prices fell 8.4% in the final quarter of 2008, and by 18% in the year; falls are slowest in central south-west area (15.2% in the year), while two bedroom flats in Docklands and family houses in Clapham/Wandsworth have seen some of the heaviest falls.

:: INFORMATION: Prime Purchase London (0207 881 2388); County Homesearch (01872 223349); Cluttons (0207 408 1010).

:: WHY ESTATE AGENTS ARE STILL OPENING UP

More than 30,000 estate agents may have lost their jobs in the last 18 months - but the doom and gloom couldn't deter Michael O'Shea from opening a new Winkworth office in Basingstoke, Hampshire, some 45 minutes by train from London Waterloo, on January 1.

"In this corner of North Hampshire, the market peaked in August 2007. The recession has been going on for 18 months, so the rest of the economy is catching up now", he says.

O'Shea says there were 25 estate agency offices in Basingstoke centre a year ago. Half that number have survived so far.

He was struggling as an independent agency himself, having opened as Keel Barrett in 1992. So he bought a franchise to trade under the Winkworth banner.

Why start at such a dire moment?

O'Shea says: "Independent agents are struggling to survive. But Winkworth brings the backing of a bigger network, and we can draw on a greater breadth of experience as we bounce ideas among several people.

"We will concentrate on three and four bedroom family houses and move strongly into North Hampshire villages. Winkworth is thriving in Winchester, and the villages in between will benefit from our move into Basingstoke."

O'Shea says that buyers are already responding to sharply lower prices: three bedroom detached houses are down from £260,000-270,000 to £210,000-220,000.

Four bedroom detached houses, around £300,000 a year ago, are snapped up from £249,000 with only 1% stamp duty. At £250,000, stamp duty kicks in at 3%.

Michael O'Shea says: "Despite all the gloom, some people still need to move - job relocations, death, divorce.

"First time buyers find it pretty difficult, because lending criteria are so tight, but investors getting a hopeless return on cash are looking at bricks and mortar again."

:: INFORMATION: Winkworth Basingstoke (01256 811730).

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