AT AN awards dinner a year or so ago the comedian Clive Anderson put it to a property executive that house prices had started to fall. Only in a few places, the property man retorted. “Like Earth?” Anderson suggested.

That was in the run-up to the Iraq war, the only time in the past six years that several key property indicators all turned down at once. Until now, that is. This week four surveys charting mortgage lending and estate agents’ activity contained phrases along the sames lines: the picture is bleaker than it has been for years, with the exception of the months building up to war in Iraq. Even then the really bad news was limited to expensive places such as Highbury in North London, where people like Clive Anderson live.

As has been said in this column before, the top of the market in London and the South East has already landed softly. Highbury terraces (of the property variety) were worth roughly the same this summer as two years ago. Right now they are probably worth a bit less because confidence is low; in the spring they may be worth a bit more.

We have become accustomed to surveys that show the market cooling from the South, with minus figures reaching up towards the Midlands. What was striking about this week’s reports, particularly the monthly survey by the Royal Institution of Chartered Surveyors (RICS), was how sharply the market has changed in the North and Wales.

Only a third of estate agents in the North, a region that includes Cumbria and the North East, say prices are still rising. That compares with 99 per cent in May. In Wales the number has dropped from 66 per cent to 22 per cent. In the North West and Yorkshire and Humberside the pattern is the same.

More worrying still, it is in the same regions that stock levels are rising. The change scarcely registers on the national chart, which records a 4 per cent rise in the number of homes for sale over the past three months, but estate agents’ reports spell it out. “There is a larger number and higher choice of properties available than there has been for the past two to three years,” says Ron Greig Estate Agents in Hartlepool. “Instructions outnumber sales agreed by two to one,” reports Andrew Hodgson, of Dacre Son & Hartley in Bingley, West Yorkshire. “Increased instructions are beginning to put pressure on the market,” says Chris Clubley in Market Weighton near York.

Buyers who were fighting over the few homes available six months ago are now starting to get picky. This is particularly true in Wales. Agents say poorly presented properties are not attracting attention and low offers are being made. “Vendors’ perceived values are no longer durable,” says an agent in Bridgend.

One key reason for the turnaround is the behaviour of buy-to-let investors. On previous occasions when the market has stumbled, such as in the aftermath of 9/11, investors have held their nerve. Dire warnings that they would bale out, bringing the market down with them, have proved unfounded.

During the past two years, as it became harder to find a tenant, some landlords did sell up, but not enough to make any real impact on supply. Right across southern England estate agents still say they are short of property, as the refusal to allow new family houses to be built in popular areas meets an ever-growing working population.

In the North and Wales it’s different. Amateur investors have piled into buy-to-let without a sideways glance at the realities of the rental market. They started with expensive city-centre flats but have since progressed en masse into cheap terraced houses, paying over the odds for properties that tenants do not want.

David Pearse, who runs his own agency in Flintshire, describes in the RICS survey how the buy-to-let chickens are coming home to roost. “The last two years have seen far too many ill-informed ‘get rich quick’ investors pouring in with little understanding of the market,” he says. “One or two void (empty) months are sending them rushing for the For Sale boards. Quite frankly, their exit will not be unwelcome.”

Could it be this last wave of speculators who bring the market down? The odds suggest not. If an “investor” pays £30,000 for a terraced house that should cost £20,000, his exit may be painful but it is unlikely to be financially ruinous. The property market crashed 14 years ago when owners could no longer pay for the roof over their own heads and when speculators found themselves stranded with mortgages on new flats they could not afford. This time round they will have to choose between selling at a loss, or possibly subsidising a small mortgage from their own pockets. If they choose the former route Mr Pearse and his colleagues say there are plenty of first-time buyers waiting to snap up these homes at lower prices.