Recovery? Sorry, not quite yet

The Nationwide Building Society has become the first of the pundits to cut its predictions of price rises for 1995. At the beginning of the year it predicted rises of 2 to 3 per cent and the number of sales increasing by 5 per cent. Now it expects both prices and levels of activity to stay the same as last year. The Halifax, which made similar predictions five months ago, is to review its position at the end of May.

The Nationwide blames rises in mortgage rates and taxes for undermining the recovery this spring. Next year will only be better if personal incomes increase and interest rates do not rise substantially, it warns.

In its quarterly, Housing Finance Review, the Nationwide charts the regional changes of the past four years. A North/ South divide is emerging again, though it is far weaker than in the Eighties. Prices peaked in East Anglia, London, the South-east and South-west in 1988 and hit their lowest point in the final quarter of 1993. Since then the graph has nudged upwards. In Yorkshire and Humberside, the East Midlands, West Midlands and Wales, the peak came in 1989. Only the East Midlands has shown signs of recovery. The North and North-west, says the Nationwide, peaked in 1991 and prices are still falling.

One region which continues to perform better than most is Oxford and the Cotswolds. Prices in popular parts of Oxford are on a par with smart areas of London. Knight Frank & Rutley (01865 790077) is selling a two- bedroom ground-floor flat in fashionable north Oxford for £135,000. Houses in the same area are selling for between £340,000 and £375,000.

The Cotswold market is also strong, with many second-home buyers coming from the Birmingham area. Jackson-Stops & Staff (01285 653334) is asking £170,000 for an exceptional two-bedroom stone cottage in the Cotswold village of Bibury. The M40 has finally started to increase the popularity of the Oxfordshire/Warwickshire area. Much of the demand is for family houses in the £200,000 price range. A pretty whitewashed house with three reception rooms, four bedrooms and a good garden near Abingdon, priced at £215,000 with Knight Frank & Rutley, went under offer almost immediately last month.

If buyers are stubbornly resisting the charms of your house, it may be worth selling to a property developer. Competition is fierce for plots of land in popular residential areas, where planning restrictions do not allow for new sites. If your house is sitting on a plot of half an acre or more in a good location, a developer may be interested in buying it, knocking it down and building two new houses. This option is most likely to suit the owners of houses built between 1900 and 1970. Older properties will usually sell in their own right and more recent properties are not on big enough plots.

Curchods (01372 471010), which has nine offices in Surrey, has used this method for a number of properties which were failing to sell. Robert Robinson, the director of Curchods' land department, said a good rule of thumb was to work out whether a builder could get two houses the same size as the existing house on the land. "The owner is not likely to get any more money for the property, but he or she will get a sale," he said. "The only drawback is that the owner will usually have to wait a couple of months for the money because the developer has to get planning permission."

The Winkworth chain is producing a London property register which lists all its properties in the capital according to price rather than area. Winkworth says buyers are less concerned about whether they live in Putney or Kentish Town, as long as the property looks right and is at the right price.

By listing according to price, the company can show a buyer with £100,000 to spend a choice between a three-bedroom maisonette with a garden in Hammersmith, a two-bedroom Georgian conversion near the Angel in Islington, and a one-bedroom apartment on the sixth floor of a purpose-built block in St John's Wood.