As first home buyers, the very first thought that stuck me and Jenny was this isn’t true. A lovely flat with such a great location and that too at a discount - there are surely some charges that are going to appear from nowhere. So, we kept asking questions and seeking clarifications. And these people were really patient and extremely helpful. And the deal was a genuine, discounted one. When we came out of the Big Property Ladder office, we knew that we were closer than ever to our own low cost house. Six months have passed since we moved in, and we are very happy.

Key features:

• INVESTMENT OPPORTUNITY
• LARGE DETACHED EX PUB

• 3 BED FLAT ON 1ST & 2ND FLOOR
• MASSIVELY REDUCED FOR QUICK SALE

Tenure:

Freehold

Full description:

HOUSE prices in Wales are falling at the fastest rate since recordsbegan, according to one of the market’s most influential monthlysurveys.

For the 10th consecutive month, house prices in Waleshave been in decline, slipping by more than 5% year on year across thenation and taking the average property price in Wales to £158,707.

Annualhouse price growth across the UK also continued its downward spiral,falling to 6.7%, its lowest level for 19 months, according to theCommunities and Local Government ministry.

Confidence in themarket is at an eight-month low, and yesterday’s survey by the RoyalInstitution of Chartered Surveyors (RICS) came as a new blow tohome-owners as it revealed 75% more surveyors had witnessed a declinerather than an increase in the value of properties.

Thatstatistic – widely seen as a barometer of the current state of themarket – represents the lowest figure since the RICS survey began in1978. And it easily exceeds the historic low of June 1990, at the startof the last housing crash, when 64.5% more chartered surveyors reporteda fall than a rise in prices.

European property began to freeze over last year, with almost every European housing market taking a turn for the worse and prices tumbling fast in Ireland and Germany, new research shows.

The majority of housing markets slowed sharply last year, according to the annual European housing review from the Royal Institution of Chartered Surveyors. Cyprus and Iceland were the only countries to buck the trend, while prices in Poland soared for another year, as money earned by immigrants in the UK poured back into Eastern Europe.

The city of Kochi (formerly Cochin) prominent as the port city of Kerala is one of the fastest emerging cities of India. Kochi is one of the few cities in India, which has the best connectivity to the outside world through sea, air and road. This is also one of the reasons for Kochi being identified as an attractive destination for investments. Moreover, this inflow of investments has created realty prospects in the city, both residential and commercial as the IT firms are bringing in more and more people into the city. However, in the recent times, since NASSCOM ranked it as the second potential city for investments in the IT sector, Kochi has emerged as a favored destination for the IT & ITES industry. And with the coming up of Cochin Special Economic Zone (CSEZ) the economical capital of Kerala is now even more attractive to the investor counting on economic and realty prospects. The CSEZ apart from catering to the business growth and industrialization with the investments in IT and Business parks has also been responsible for growth of Real Estate Kochi .

The terms real estate and real property are used primarily in common law, while civil law jurisdictions refer instead to immovable property. In law, the word real means relating to a thing as distinguished from a person. Thus the law broadly distinguishes between "real" property (land and anything affixed to it) and "personal" property (everything else, e.g., clothing, furniture, money). The conceptual difference was between immovable property, which would transfer title along with the land, and movable property, which a person would retain title to. The oldest use of the term "Real Estate" that has been preserved in historical records was in 1666. A more important reason for real estate’s rise has been a flood of new investment capital. Capitalization rates yields have dropped over the past three years to near-historic lows. Real estate is, by its nature, an expensive non-liquid asset. This means that it costs a lot of money to own it, and it can be difficult to sell. In development activity, there are also the added costs of improvements themselves and the fees of various and sundry consultants necessary to get the work done properly.  A large part of the work of developers is the management of risk.

At a time when wage packets aren’t getting any fatter, interest rates have risen quite steeply, so it seems unlikely that there will be a boom in the months ahead. Interest rates would have to drop substantially, salaries would have to rise and there would need to be an increase in demand, perhaps fuelled by a combination of immigration and a lack of new houses being built.

That’s not to say that mini-booms can’t happen on a local level across the country. Major investment in specific areas – the Olympics in east London being a prime example – can make them more desirable, with a resulting increase in demand for properties to buy, leading to higher house prices.

According to Mandy Bradley, director of Propertyforecasts.co. uk, there are a number of reasons why certain places can enjoy substantial rises in value. "It can be because employment prospects are on the up, or because of improvements to travel links. Maybe major investment is coming into the area, or a desirable school is being opened," she says.

According to the website’s analysis of economic statistics, average UK prices will rise by around 5 per cent over the next 12 months, but prices in some areas could double by September 2012.

Hot locations include Pontefract in West Yorkshire, Midhurst in West Sussex, Neath in West Glamorgan and Perranporth in Cornwall. The likes of Glastonbury in Somerset and Windermere in Cumbria are also on track for double-digit percentage-point rises.

What are the first signs?

The first move is likely to be a spike in demand for properties – usually triggered by an increase in both the number of people in employment and the wages being paid, along with a reduction in the cost of borrowing.

For example, bumper City bonuses have helped to maintain the price of London properties, even while things have been cooling off elsewhere in Britain.

Residential property prices in prime central London increased by 3.9 per cent in July, according to estate agent Knight Frank, pushing the year-on-year increase to 36.4 per cent.

Another sign of a boom is that estate agents will be selling houses as quickly as they put them up for sale, and are posting leaflets through doors, saying that there is a long list of potential buyers just waiting to move in to their home.

Who stands to win?

Everyone with a property will experience gains in this kind of market, but the big winners will be those wanting to downsize, because they will be able to realise the gains and have thousands of pounds in their pocket.

Homeowners who don’t want to move can also benefit by re-mortgaging and releasing the equity in their homes to fund high-street spending, home improvements or holidays abroad.

Those with a portfolio of properties – particularly those who have managed to clear any debts – will be in the money. In fact, this could be a good time to cash in the gains you have made. The temptation in a rising market, of course, is to stay in it for too long.

Who stands to lose?

First-time buyers will suffer badly. They are already being priced out of many towns and cities, so even fewer of them would be able to get on the property ladder if prices were to rise again without a major hike in wages.

It’s a similar situation for those with growing families – if you’re chasing a house with an extra bedroom, you might find that prices shoot out of reach. The National Housing Federation says prices are already 11 times the average wage.

It is warning that values could increase by a further 40 per cent in the next five years, taking the cost of the average house to £300,000.

What are the strategies for success in a boom?

Buy as much property as possible – and don’t hang around. The longer you leave it, the quicker prices will rise, making it more expensive to buy.

If you are content with your existing home, you could consider snapping up buy-to-let properties, which will not only rise in value but give you an alternative source of income.

Generally, the best gains will be seen in "up-and-coming" areas. This is where local knowledge can be crucial. There are a number of ways to spot a future boom area, and getting this right could be the route to riches.

Look for areas where access is being improved, particularly road and rail links, as these could be attractive to commuters, or hunt for areas that are earmarked for major projects, such as a government-funded regeneration scheme.

Also consider towns and cities near areas where prices have risen sharply in the past – they usually benefit from the knock-on effect of people looking for the next most affordable place in the vicinity.

Once you’ve found the right town, skips and scaffolding are more signs that aspirational buyers are descending on certain streets, pushing prices up as they make their improvements.

The bust scenario

Will it happen?

First, let’s look to the history books. Crashes have previously occurred when rising unemployment and soaring interest rates have put homeowners under severe financial pressure. In the worst cases, owners begin to default on their mortgage payments and are eventually forced to sell their houses cheaply, or have them repossessed.

And the here and now? Despite five rate rises since August last year, interest rates and unemployment are still historically low, and there’s a relatively strong demand for properties. But there is evidence that some people are already having financial problems.

In the second quarter of this year, the number of residential properties being sold at auction rose by 32 per cent to 5,120 – driven by an increase in repossessions. The highest concentration of auction activity took place in the North-west.

Oliver Gilmartin, an economist with the Royal Institution of Chartered Surveyors, says: "With the full impact of interest-rate rises yet to filter through into higher mortgage costs, we continue to expect a rise in the number of homes going under the hammer into 2008."

Brits are already raiding their savings accounts to pay other bills, according to Birmingham Midshires’ Saving Britain campaign. Amid speculation of further rate rises, people have withdrawn an average of £400 from their savings over the past three months – a 14 per cent increase on the last three months of 2006.

In addition, the increased cost of borrowing means people whose attractive two-year fixed deals are now coming to an end will see a sharp rise in their monthly repayments as they switch to a new deal.

How do we know that a crash is on the way?

One tip is to look for substantial numbers of For Sale signs in the neighbourhood, according to Miles Shipside, commercial director of Rightside.co.uk. If the same houses have been on the market for a while, "it’s a sign of stagnation".

He says: "If it continues for a long period of time then that’s obviously not healthy for the market as it means prices are way out of kilter with what people can afford and will have to be substantially reduced."

Keep an eye on the economy as a whole. There would need to be a fairly dramatic rise in interest rates to push up the cost of borrowing, along with a subsequent increase in living costs and a wage freeze; none of which look very likely at the moment.

It’s only when people can’t afford their monthly repayments that they run the risk of having their homes taken back by the lender. The key, therefore, is people remaining in employment so they can meet the cost of these higher interest rates.

Repossessions are bad news for the property market because the homes are usually sold off cheaply, which undermines the values of other houses in the area. If there are a substantial number of court-ordered sales then asking prices will have to fall in order to attract any potential buyers.

Who stands to lose the most?

Anyone who can’t afford to keep up repayments, or who has to move either for employment or family reasons. Owners only suffer in a downturn if they have to sell, otherwise the losses are only on paper.

At greater risk are those who stretched their finances too far in order to buy their current homes – particularly those who lied about their income on self-certification mortgages.

Anyone re-mortgaging could also have problems, says David Hollingworth, spokesman for mortgage broker London & Country. "The problem is that people will not be able to get the same great deals that they could two years ago. Anyone coming off a fixed-rate deal will see their repayments increase."

Will anyone emerge unscathed?

Quite a few of us, according to Tim Crawford, group economist at the Halifax. The house price boom – which has seen the average property rise in value from £121,000 at the end of 2002 to almost £200,000 today – will afford some protection. "A lot of people have equity in their properties already because of the increases that we have seen in house prices over the past five to 10 years and they’ve also been reducing their debt over that period, so the majority of households should be generally well placed to survive any fluctuations in the market."

If a wobble does occur, it could be beneficial for anyone bold enough to move up the housing market, as the prices of prime houses start to drop. If everything loses value across the board, then the price gap between a three- and four-bedroom house also shrinks.

What are the strategies for success?

If you want to move and believe the crash is coming then you should sell before it actually happens, says Shipside. "If you need to sell quickly, then price very aggressively rather than wait for the market to drop," he explains. "When you sell, go into rented accommodation, wait for prices to reach what you perceive to be the bottom of the market, and then buy again."

Knowing when prices have hit rock-bottom is difficult. Improve your chances of working this out by speaking to estate agents, watching what’s going on in the area and using your local knowledge of different roads.

House prices could slow down sharply over the coming six months, Britain’s fifth-largest mortgage lender warned today.

Northern Rock said that house prices, which last month showed annual increases of just over 10%, could be rising at the same level as wages by the year-end, which would mean by as little as 4%.

’Because so many people now have fixed-rate mortgages generally running for two or three years the recent hikes in interest rates have so far only affected around a third of borrowers,’ said chief executive Adam Applegarth.

’But during the second half they will begin to bite and household spending will be squeezed. That will dampen the home moving market but, conversely, boost the remortgage market as people search for the best deal.’

He added: ’If you take out the central London market, which continues to power ahead and so skews all the data, the rest of the country is almost certainly down about the 4% level of house price inflation.’

Northern, which issued a profits warning last month, boosted its dividend today by 30% to 14.2p for the first half and promised a similar increase for the final payout.

Headline first-half profits rose by 29% to £224m but the group repeated that for the full year and next year it expects growth of only about 15%. Unlike rival lenders such as HBOS which fund most of their mortgage lending from other customers’ savings, Northern Rock borrows most of its funds from the wholesale markets.

That means its margins become squeezed as interest rates rise but most of its borrowers remain on lower fixed-rate mortgages for a time.

Homebuyers in the UK may soon be feeling the effect of a bad debt crisis in the US.

On the other side of the Atlantic, property prices are falling because banks have lent money to people with a poor credit history who are increasingly defaulting on their loans.

This is causing huge instability in the US market which has seen house prices fall and the dollar tumbling against other currencies.

Yesterday, the dollar fell to a record low against the euro and the pound has been trading above two dollars for more than a week.

Analyst Datamonitor says in the UK the sub-prime market, as it is known because it lends to those who have poor credit ratings and have often defaulted on repayments, increased by 28% during 2006, to a total of £24.6bn.

This side of the market is likely to continue expanding at nearly twice the rate of the traditional mortgage market but is also at risk from people defaulting on their loans.