REGIONS HIT HARD BY COLLAPSE IN NEW HOMES OUTPUT

The collapse in the output of new homes will be most drastic in the North-West, Midlands, and South-East regions of England, and in Wales and Northern Ireland according to figures from the National House-Building Council (NHBC).

NHBC received 50,110 applications to start new homes in England, Scotland, Wales, Northern Ireland and the Isle of Man in January-June 2008 - a 42% plunge on the first six months of 2007.

In the second quarter of 2008, the plunge was more drastic in North-West England (-58%); West Midlands (-57%); East Midlands (-50%) and South-East England (-49%). Wales saw a 54% drop, Northern Ireland 53%.

Greater London, by contrast, saw an 8% increase in applications in the second quarter.

If the number of new home starts in 2008 was to come in around 100,000, as these figures suggest, it would be less than half the 240,000 new homes per year target set down by Mr Brown soon after he became Prime Minister last year.

The idea that housing associations, flush with Government cash, can take up slack offered by the collapse of private sector, is only partially borne out......continued below

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NHBC says housing association registrations in the second quarter - 9,000-plus - were 13% down on a year ago.

"Regionally, the biggest percentage decline in new home starts during the second quarter was in the North-West and West Midlands, down 58% and 57% respectively," NHBC chief executive Imtiaz Farookhi says.

"Greater London was the only region to experience an increase in new home starts during the period, where it appears there is still strong demand for new homes which is keeping market confidence slightly higher."

In the second quarter, builders sold an average 454 new homes each day, against 592 in 2007, a 23% fall.

:: HOME IMPROVEMENTS MIGHT BE LOSERS IN THIS MARKET

Homeowners planning to beat the housing market slump by staying put and improving their present home could face huge losses if they try to sell up soon after finishing building work, says a new survey from Abbey Mortgages.

The lender reckons a gleaming new kitchen - costing £18,700 - might add only £4,894 to the eventual selling price, representing a loss of nearly £14,000.

Likewise, a luxury £20,000 conservatory might add only £6,235 to the eventual selling price, representing another disastrous loss of nearly £13,800.

Abbey admits the survey could cause alarm, because as many as 8.3m homeowners have indicated an intention to improve their home within the next year.

The lender reckons 2.4m homeowners are "looking" at a new bathroom, while 2.9m plan a conservatory or some other form of extension. Nearly 600,000 may be intending to convert a loft or basement.

Many are attracted to the idea by the thought that builders' prices will become more reasonable as they chase work during the next 18 months.

But Abbey fears many of these proposals could result in negative "net value added" of as much as £20,232 on a sizeable extension.

The lender claims that a third of estate agents have changed their minds about the value of home improvements in the past 12 months - and warns that owners are unlikely to recoup money which they have invested in their property when they eventually sell up.

But 11% believe that home improvements are more important than before, and 58% have not changed their earlier advice.

"Our research shows that very few home improvements will actually add more value than they cost to implement at the moment, so it's important that people are making these improvements because they want to live in the end result and aren't doing them purely to add value," Abbey Mortgages director Phil Cliff says.

However, Jonathan Haward at Truro, Cornwall-based County Homesearch, an agency which hunts for suitable properties for buyers too busy to look for themselves, says: "If somebody has to arrange an extra mortgage to pay for a conservatory, there is certainly a strong possibility they will not see a short-term gain on their investment. That is normal in a falling property market.

"However, if you plan to stay in your home for some time, I still advise owners to draw up plans, invite some highly competitive tenders from builders and get on with it.

"In due course, they are pretty certain to get their money back on a quality job."

Kent-based chartered surveyor Charles Stimpson, author of The Ideal Property Book, a new guide for homeowners, says: "In any market, it is all too easy to spend money on pseudo-improvements which don't add much value.

"Every property has a ceiling value, depending on age, type, condition and location, and many properties are improved beyond the ceiling value, meaning owners don't get all their money back.

"However, now should be a good time to get improvements carried out, if work is done to good standard and at reasonable price."

::INFORMATION: County Homesearch (0870 1123 114).

The Ideal Property Book, covering over 130 topics, is available from www.amazon.co.uk and www.theidealpropertybook.com, priced £13.99. Quote ISBN number 978-0-9555655-0-2.

:: CARELESS LANDLORDS COULD FACE £6,000 LOSSES

Landlords who fail to check the financial standing of new tenants could find themselves out of pocket to the tune of £6,000 - equivalent to six months' income on the average rented home which earns £11,952 per year.

That's the warning from the National Landlords Association (NLA), which has over 14,000 individual landlords and more than 80 local authority affiliates on its books.

The NLA urges member landlords - and others - to use its new Tenant Check service to ensure a prospective tenant is who they say they are, enjoys steady income, and can afford to pay the rent.

Members can access NLA Tenant Check for as little as £6, while other landlords pay as much as £28 to use it.

"Most members do not use letting agents to check out potential tenants, so we see Tenant Check as a tool to reduce problems in the future," NLA spokesman Steve Hilton says.

"The more people going into the private rented sector as economic conditions get tougher, the question of payment could be an increasingly important issue for landlords managing small portfolios."

"There are many easy headlines about failing landlords, but a significant minority of tenants don't know how to behave in other people's property."

The new service will detail County Court Judgements (CCJs) and will also record instances of landlords pursuing tenants for unpaid debts on the Ministry of Justice website (www.mcol.co.uk).

"NLA Tenant Check is a simple and affordable tool enabling landlords to reduce the risk of possible future problems with rent arrears and gives them the opportunity to paint a clearer picture of prospective tenants," says NLA chairman David Salusbury.

"By simply entering a few details about a new tenant into the system, the landlord gets a profile of a person's credit history which helps to make an informed decision about their ability to keep up with rental payments."

INFORMATION: Small Landlords Association (0207 840 8900 and www.landlords.org.uk)

:: PROFESSIONALS SET TO GRAB AUCTION BARGAINS

With the number of sales secured in residential property auctions slumping to just 53% - against 80-90% as a norm only a year ago - the professionals are flushing out all the best buys while amateur landlords struggle to find the cash.

These trends emerge in the analysis of June auction data by Essential Information Group, which tracks every auction result across the UK.

On residential sales, it says sales of more than 2,000 units in June 2007 raised £330m, with a 72% success rate. In June 2008, sales of 1,372 properties showed a 52% success rate and raised £185.7m.

E.I. figures suggest the number of repossessions up for auction has soared almost 300% in three years - totalling 3,102 in the first quarter of 2008 against 799 in 2005.

At Allsops, the largest auctioneer in the UK, it is expected that more than half the units in the latest sale will be repossessions, but bids are likely to be driven down because banks won't fund would-be bidders.

Savills head of residential auctions, Chris Coleman-Smith, attacks the banks for creating "a kind of non-virtuous circle pushing prices down".

"They lent too much to people who are now over-exposed, so they are forcing repossessions, but they are not lending anything, so people can't afford to buy the property out of repossession, which hits prices," he says.

The biggest fall in receipts from residential auctions is in South-West England (down 48.8% from £104.6m to £53.6m), South-East Home Counties (down 42.9% from £187m to £106.8m), and North-West England (down 41.9% from £114m to £66.3m).

INFORMATION: The Property Investor Show will be held on Sept 19-21 at the ExCel Centre in London Docklands. Further details of the event can be found on www.propertyinvestor.co.uk.

:: MULL OF KINTYRE BEATS THE CRASH

For the price of a London penthouse, you can have an entire island in the north of Scotland.

The Edinburgh office of agents Knight Frank has put 358-acre Sanda Island on the Mull of Kintyre on sale - and even Sir Paul McCartney, who did so much to make the place famous, might be impressed by the £3.25m price tag.

For that buyers get a five-bedroom farmhouse, three homestead cottages, three lighthouse cottages, the Byron Darnton Tavern, a boathouse and pier, and a selection of sandy beaches and rocky coves.

With UK-based holidays set to make a big comeback as fuel prices soar, many of these properties could soon be nice little earners - from visitors on the daily ferry sailings from Campbeltown, some 13 miles away on the mainland and a three hour drive from Glasgow.

Water supply shouldn't be a problem: there's a 6000 gallon holding tank on the north side of the island and another 700 gallon tank alongside the lighthouse cottages. Electricity is generated by two diesel-powered generators supplemented by a wind turbine.

The owner of the Sand is entitled to call themselves "Laird of Sand" - and the island is one of the few in Scotland permitted to print its own stamps.

Let's just hope the postman are trained to recognise them when they arrive in the Home Counties commuterbelt.

INFORMATION: Knight Frank, Edinburgh (0131 222 9600).