PROPERTY / There's no time like the present: Houses are coming on to the market at half their value three years ago. Is this the right time to buy? Caroline McGhie finds out

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IT COMES like the first flutterings of the wind in the trees before a storm - a sale here and there, then tongues start to wag; then the 'For Sale' signs start being changed for 'Sold', and you realise it has really happened: the housing market is alive again.

My parents-in-law have been trying to sell their pretty flint cottage near Cromer, Norfolk, for three years. Few potential buyers crossed their doorstep in that time and as each year passed, the subject of selling became almost unmentionable. Now, suddenly, a purchaser has appeared.

But it isn't just their example that makes me think the cobwebs of the slump might be blowing away. In my street in south London there's a party a week for the next month, all to see off neighbours who have suddenly sold their houses after trying for a year (or two, or three).

The professional watchers of the housing market have said it all. This month a firm of stockbrokers predicted price rises of up to 10 per cent next year, and that the volume of sales will increase by 20 per cent this year and a further 18 per cent in 1994. The Council of Mortgage Lenders noticed that gross advances increased by more than 40 per cent in March compared with the previous month. And last week two building societies reported slight increases in house prices.

The estate agents have been quick with the good news, too. The Royal Institution of Chartered Surveyors quarterly report for the three months up to March this year, which is a kind of nationwide vox pop of estate agents, found that nearly 90 per cent believed prices were stable or rising. To put this in perspective you need only take a look at November last year, when nearly 75 per cent of them felt that prices were still falling. The National Association of Estate Agents also believes that the signs are better than they have been for three years.

But how real is this recovery? How long will it last? These early signs of change have already helped a lot of people. Philippa Barton, for instance, had been trying to sell her three-bedroom flat in Hackney for more than 18 months and found a buyer a fortnight ago. She feels this was because the price suddenly seemed so good. She had bought it for pounds 73,000, lavished money on it, and then sold at pounds 62,300 through Winkworth. 'The way I look at it, the buyers got it for pounds 15,000 less than it was worth to us,' she said. The flip side is that she has been pleasantly surprised by the attractive prices in her own search for a new home.

Across the spectrum, prices have adjusted to a level that must be enticing buyers. A Grade II listed Elizabethan moated manor house near Diss in south Norfolk, just on the market with Strutt & Parker, has been priced at pounds 295,000. Two years ago another agent put it at pounds 375,000. But the owner, Grant Stewart, has made a firm decision to move, and to that end he has accepted Strutt & Parker's price. There have been seven viewings in a fortnight, with more to come. 'I gather that is pretty good for a country house. They tend to be seen by fewer people because buyers don't pick up batches of particulars and see handfuls of houses at a time like they do in the city,' he said.

According to James Laing, Strutt & Parker's country house expert, another reason why buyers are appearing is that interest rates have made borrowing more attractive than saving. And with London properties beginning to move, there is an assumption that country ones will follow soon. The countryside is offering houses in the pounds 250,000- pounds 400,000 bracket that once fetched pounds 500,000- pounds 800,000.

But it won't last for long, apparently, because many of the buyers will come from rented property. 'If you have been renting a house and then buy, you are not releasing a house on to the market,' Laing says. 'Similarly there are people coming in from abroad to buy and they don't release houses either. There will be a shortage of supply in the next month.'

Now, therefore, is the time for people to make their move if they are intending to leave London for the country. 'In Fulham, for instance, you could sell a little four- bedroom terrace house for pounds 300,000. The price may have dropped by 50 per cent, but you could sell it now as London rises and look at the country market while it's at the bottom, to get a large cottage or a small farmhouse for the same amount.'

There is already a paucity of choice across the board. This can come as a shock. Kate Chapman moved into rented accommodation last year and thought she would have the pick of whatever came on to the market. But she made offers on five houses, none of which was accepted, and is now deeply disillusioned. A sixth possible purchase collapsed because of a bad survey and the seventh has foundered in a contract race. 'We hadn't thought there would be so few properties or that it would be so difficult,' she said.

The shortage of properties may eventually cause prices to harden. Dowell Conning, director of Allen

& Harris and Gribble Booth and Taylor, estate agents that cover the south and south-west of England, says that prices are showing signs of drifting upwards, particularly in Oxfordshire and Berkshire. After months of slippage, the quarterly prices of different types of houses in these two counties are now showing price increases of up to 7 per cent. March showed a 40 per cent increase in sales. 'But remember that they had dropped by so much that a 40 per cent increase is not that huge.'

The market is still so fragile, however, that the slightest problem could make it collapse again. Too many vendors trying to get too high a price would tip the balance, according to Edward Waterson of Carter Jonas in Yorkshire. 'Last year's vendors were those who had to move, whereas now a different type is coming forward out of choice,' he said. 'They are being firmer with prices - and if they are too greedy and there is too much hype, the market will start to stagnate because houses with high price-tags won't find buyers.'

One of the most obvious signs that the recession is loosening its grip is that some of the huge new developments that have hung about as an embarrassing reminder of better times, are now beginning to shift. Even some of the most expensive flats in London, those at Palace Green, overlooking Kensington Palace, are finding buyers. The 20 apartments were originally priced at over pounds 30m for the lot. Within the last four weeks Cluttons London Residential has sold six for more than pounds 10m and three more are under offer.

These white elephants left by the boom are being taken like fashion collections to be displayed on the property catwalks of the richer capitals of the Far East. Cluttons London Residential recently sold 33 flats worth pounds 7m at its Regent On The River development; after exhibiting it in Singapore a further pounds 1.7m of sales followed. It has just shown Vestry Court, Westminster, there too, and clinched pounds 2.2m of sales. I think I'll put my house on the market to see what happens.