COULD RULES AND RED TAPE THREATEN HOMES RECOVERY?

This time, he suggests, local authorities might have a key role to play in breaking the deadlock - by adjusting Section 106 agreements which compel builders to contribute towards public infrastructure projects like roads and schools in return for planning permission.

However, the massive slowdown in building - which is driving thousands of skilled workers out of the industry - might help hard-pressed builders, many of whom are fighting for survival.

As unsold stock is slowly sold off, pressure to offer ever-increasing discounts may be easing.

Stewart Law, chief executive of Assetz, which handles property investments for individuals in the UK and abroad, says: "If the distressed property market had a house price index, it would already have reached a bottom and there are clear signs that these prices are beginning to turn upwards.

"There are multiple bidders for much distressed property - an early warning indicator that the wider market trend will change in the near future".

Law claims the "distressed sales market as a whole" was under most pressure from September 2008 until January 2009.

"There will be further distressed sales in the market for a long time to come," he says, "but huge discounts created by a dearth of buyers are beginning to moderate.

"Developers who are refinancing their businesses are not as desperate to dispose of stock, or have already raised the cash they need."

However, new homes might still not be the first place to look for buyers who managed to get a mortgage.

For the new homes website www.SmartNewHomes.com claims the average new house price in December was £226,400.

If accurate, that is still far ahead of the £150,500 figure which Nationwide BS gives as the average price of a home.

:: AUCTIONS PITCH PRICES LOW TO DRAW THE BIDDERS

The sales rate achieved in many auction sales was falling uncomfortably close to 50% at the end of 2008 - which might explain why early sales in 2009 are pitching guide prices at significantly lower levels.

The February brochure from Countrywide Property Auctions, for instance, has a selection of flats and terraced houses in the Midlands - under the hammer in Birmingham on February 19 - for around £50,000. Many are repossessions offered on behalf of lenders.

The brochure also suggests another trend seen in previous downturns: falls in property prices tend to be turbo-charged in areas of weak economic activity, because the number of likely buyers is sharply reduced.

A two bedroom mid-terraced house in Barwell, Leicestershire, is guided at £55,000, while a three bedroom semi in Cannock, Staffs, has a £65,000 tag.

A three bedroom end-terrace house in Kirkby-in-Ashfield, Nottinghamshire, boarded up and in a poor state of repair has a £35,000 guide.

Countrywide's second sale, in Bristol, includes a well-maintained two bedroom Victorian terraced house in Swindon (£70,000). A pair of flats in the Pontypridd, in the Rhondda valley of South Wales, are guided at £30,00- 40,000.

Although there may be too many of them, nearly-new city centre flats often fare better in auctions - because a range of buyers, young and old, might be interested. A two bedroom flat on the tenth floor of a block in Cardiff is guided at £100,000-105,000.

Countrywide's London sale has a two bedroom flat in a block at East Tilbury, Essex, which looks a bit like a Post Office sorting office. With a guide of £60,000-65,000, a patient bidder could be sitting pretty if and when the long-promised Thames Gateway project eventually rolls into town.

A three bedroom split level maisonette in Margate, guided at £55,000-65,000 also looks a long-term gamble on the Japanese 'bullet train' which threatens to bring this stretch of the East Kent coast much closer to London, in travelling time, from November.

Clive Emson auctions covering Kent, Sussex, Surrey, South London, Hampshire and the Isle of Wight, offer a fascinating selection, for owner occupiers, investors and small builders able to handle renovations fairly cheaply.

Emson's Brighton sale (Feb 19) includes a four bedroom stone cottage at Pease Pottage, outside Crawley (£185,000-195.000) needing modernisation, and an imposing block in St Leonards-in-Sea, East Sussex, which could be converted to provide twelve flats (£280,000-320,000).

The Maidstone sale (Feb 20) has a one bedroom flat (£120,000-130,000) with its own private garden close to the town centre of Broadstairs, one of Kent's most attractive seaside spots.

There's also considerable potential in a Grade II-listed three bedroom cottage at Wittersham, Tenterden, dating from 1400 with a wealth of beams and inglenook fireplace. Anybody who gets the modernisation right should enjoy a huge uplift on the £150,000 guide.

:: INFORMATION: Countrywide Property Auctions (0870 240 1140); Clive Emson (0845 8500 333).

:: PRICE PLUNGE GATHERS PACE IN CENTRAL LONDON

Despite reports of Russian billionaires hunkering down in Mayfair, and euro-waving buyers astonished by the value to be found in London bricks and mortar as sterling sinks, the fall of property prices in prime Central London is still accelerating.

Leading agents Knight Frank say the fall in January was a stunning 3.7%, the latest episode in a 21.4% plunge since the March 2008 peak.

On £1m-2.5m homes, the fall is even greater - 25.3%.

A month ago, Knight Frank said the December fall was 2.2% - so January's slump is nearly twice as severe.

However, Knight Frank acknowledges "increased activity from domestic and international purchasers. Viewing levels have risen substantially - up nearly 65% in January 2009 compared with January 2008."

Knight Frank says the biggest surge in viewings is from buyers from the Middle East (52%), followed by Europe (38%). Among Europeans, there are particularly strong showings by Italians, French and Norwegians.

Areas attracting the closest interest are the core of Mayfair, Knightsbridge, Belgravia and Chelsea, with viewings up by around 80% on a year-on-year basis.

However, if all these foreign visitors are looking closely at Knight Frank statistics, it's easy to see why some may be inclined to hesitate before making a bid.

For Liam Bailey, Knight Frank's head of residential research, says: "Our Prime Central London index and the more mainstream market trackers paint the same picture - prices are down by a minimum of 20%.

"However, our own view of peak-to-trough price decline in Central London has been pushed out to 35%, although we accept even this figure is in danger of being surpassed by the early summer.

"We would note that there is evidence that the prime new build sector in central London has seen price adjustments on this scale already, albeit in many cases even these new lower prices are yet to be successfully tested in the market."

At the start of January, Knight Frank forecast a 30% peak-to-trough fall. So the first month of the year has made its diagnosis even gloomier.

:: HOW TO STOP A BUYER HAVING SECOND THOUGHTS

Around 40% of property sales agreed are actually collapsing before exchange, a failure rate almost double the 20% failure rate when the market peaked in mid-2007.

Nick Wooldridge, regional director of Stacks Property Search and Acquisition, which hunts down suitable properties for buyers to busy to do the job for themselves, says: "Hanging onto a buyer once you have found one is a combination of art and science.

"Keep working at it, however certain it looks, and don't relax until contracts are exchanged."

Here are Nick's tips to avoid a buyer pulling out when you were convinced you had him - or her - safely hooked:

:: Be realistic on price, and what's included.

:: Don't be nit-picking on what is included as extras, and don't allow small things to become bigger issues.

:: Be co-operative with regards to access for measuring up and surveys.

:: Provide as much information as you can about the property, to make the job easier for the buyer's solicitor.

:: Keep feeding the buyer with information which gives them a warm glow about your property - info about the local community, schools, church, local events.

:: Avoid gazundering by keeping channels of communication open - don't allow time to pass without anything happening.

:: If a chain threatens to fall apart because of a price reduction at one level, try to keep it together by negotiating at other levels of the chain.

:: Be a proactive seller - keep in touch with the agent and all professionals involved in the sale. If something is blocking progress, don't wait for others to sort it out.

: Take your buyers out for dinner and tell them they're marvellous and probably beautiful. That's my tip, rather than one from Stacks, but there may be little harm in it during these crazy times!

:: INFORMATION: Stacks Relocation (01594 842 880).

:: HOW BRITISH OWNERS CAN CHECK OUT A PROFIT

Most British property buyers in France claimed they crossed the Channel for quality of life, instead of chasing a quick profit.

But some appear to be having second thoughts - after the rise of the euro against the pound offered the prospect of a windfall profit.

The number of British property owners in France trying to sell up and return to Britain has jumped by almost 20%, claims the Chez Riviera estate agency on the Cote D'Azur.

Donal Warde of Chez Riviera reckons the big exodus is boosted by currency calculations: the plunge of sterling means owners can take a lower price in France and still return home with many more pounds than they spent in the first place.

Donal Warde says: "A property in the Eurozone selling at E200,000 would give its owner in the region of £188,000 - roughly a £57,000 increase over the last two years."

The agency quotes the case of Jon Carn from the West Midlands, who paid E122,000 in 2003. The property is on sale for E190,000 - which will provide Jon with a considerable profit to go towards the larger home which he wants back in Britain.

Chez Riviera figures claim that in areas like Nice, which recorded price rises of 12.7% in the year to December 2007, many recent British buyers are sitting on sizeable gains - before currency calculations make their profit even fatter.

Donal Warde claims British buyers in France try to dodge the pain of the plummeting pound by getting French mortgages, which limit the need to transfer pounds into euros at the current rate.

However, owners or sellers chasing profits from currency dealings must always remember the gamble can go either way.

James Walton at currency specialist InternationalFX says: "If in six months' time, the pound regains half of its losses, then those sending money to the UK will have missed the boat on windfall cash. Taking advantage now could ensure you end up with thousands more than expected."

ends