Catherine Pepinster: It's a buyer's market. But what will you get for your money?

Apply the swinging-cat test and you realise how unsuitable much new housing is

The Whitbread winners, Michael Frayn and Claire Tomalin, have left the bookish enclave of Gloucester Crescent, NW1 for the leafier delights of Richmond upon Thames. Along with their many awards, they apparently carted enough books across the Thames to fill 250m of shelving in their new home. No decluttering for the Frayns, then. And it's no wonder. Just as we like to keep those we love about us, so the things we love are important too. They help make the anonymous bricks and mortar a home.

Housebuilders, however, have other ideas, as I realised when I popped into some show homes not far from the Frayns' new haunt. There's a glut of new homes along the Thames, built along the once dilapidated Brentford waterfront. River views! the adverts proclaim. Designer kitchens! En suite baths and showers! Decking! Cashbacks! Legal fees paid! There's a lot more of those offers now, a sign that the property boom may be over.

House prices have started to fall across Britain with, according to the Royal Institution of Chartered Surveyors, London and the South-east hardest hit. It estimates that prices in the capital were down by 4 per cent in the final quarter of 2002 and are down another 4 per cent so far this year.

The coming of war appears to have sent a shiver through the market, with prospective sellers deciding to stay put, and buyers too nervous to commit.

When the housing market takes a dive, what drops in price first is the dross – the shabbier properties in the most inconvenient locations. But it's about time that the price of new homes, particularly apartment blocks, took a tumble too. First-time buyers, keen to get on the ladder, are easily persuaded to take anything that's on offer, even when the price is a whopping £250,000 for a minute, one-bedroomed flat.

A trip around a show home shows how cleverly people are duped into thinking they get more of a home for their bucks. Rooms are artfully decorated in pale colours; furniture and carpets are similarly neutral, and there's a proliferation of mirrors. The bedroom's a delight, but take a closer look and you see it can only accommodate a bed and a cabinet. The living room? Just a two-seater sofa, a table and matching spindly chairs. Nowhere to put even a TV or a hi-fi. As for books, forget it. There's not even room for a hundredth of the Frayns' collection. This is the home as a hutch, from which, watered and showered, you spring to start another day at the office, followed by a night in the bar.

Today, builders can build as small as they want. But a glance at the old rules – the Parker Morris standards of the Sixties – shows how unlivable living space has become. Parker Morris stipulated that a home for two people should have 48.5sqm of living space. Plenty of new one-bedroomed flats have only 24sqm; even a two-bedroomed apartment often has just 41.76sqm.

These flats, crammed into every urban space available, might please the Deputy Prime Minister, John Prescott, who wants an extra 200,000 homes built in the South-east, but even some young single people are going off them. Increasing numbers of detached houses are being bought by friends, joining forces to buy a more decent space.

But the problem is more serious than that. With their construction making up a third of all new homes, these tiny apartments do little to alleviate the biggest problem of all – more homes needed for families. This must be addressed, whether the market continues to dive, or bounces back after the war. Mr Prescott should have another think about how to get more houses built that are big enough for families – even if they're too small for the Frayn family library.