I have a confession to make. I pulled out of a property transaction earlier this year and left the seller high and dry. I’d like to say it was because of my impeccable sense of timing in all matters financial. That I  could see the UK housing market was tanking and that commuter flats (such as the one I was trying to buy) would tank more than most.  Or even that I was playing hard-ball and but had my bluff called. In fact, it was none of these - my solicitor spotted a show-stopping legal hitch and off I went to rent instead.

It didn’t stop the estate agent questioning my decision though. Was I trying to ‘gazunder’ the seller, he mused aloud in a subsequent phone call. Fortunately, though journalists (and estate agents) are sometimes accused of being only loosely acquainted with ethics, I was able to show I had the purest of motives. But, according to estate agents, gazundering - where buyers demand a last-minute price drop - is back with a vengeance.

“It’s increasing and we’re finding the average reduction purchasers try for is between 5-10 percent, says Richard Cotton, senior partner at London-based property consultants and surveyors Cluttons. “The 10 percent figure is mainly at the top end.”

So far, in London and the southeast of England anyway, sellers still mostly have plenty of equity in their properties and there hasn’t been a rush of forced sellers. Unhappy vendors will also tell would-be gazunderers to get lost if they try it on at the last minute, particularly if - as is often the case - they have already dropped the price by 10-20% to attract them in the first place.

But this could change as thousands of homeowners on low fixed term mortgages find repayments rising to much higher, unaffordable levels. They may then have to sell for whatever they can get.

“We’re not there yet. But in those circumstances the chances are that you might not find a buyer for up to six months,” Cotton told me. “Then my advice would be to take it on the chin. Get on with your lives, cut your losses and move on. If you’re in a chain, the obvious thing is to share the price cut with those further up the chain.”

Discussion of gazundering usually provokes extreme reactions. In the same way that gazumpers,  those who trump others when the market’s going up, infuriate the losing bidders, vendors usually express contempt for those who try it on when the market’s going the other way.

Unlike Scotland, where your bid is considered legally binding, the price you pay for a house in England and Wales isn’t fixed until the exchange of contracts. Up to that point, anything goes. So gazundering isn’t remotely illegal. But is it ethical? Visiting an estate agent in southwest London last week to to check property details, I asked a negotiator what he thought. I don’t know why, I guess I was just interested in his reaction. The question provoked a wide smirk - and gales of laughter at the next desk. I had my answer.

The government proposes to stimulate the housing market by scrapping stamp duty for a year on purchases of homes worth less than 175,000 pounds.

At the moment, the no-tax threshold is 125,000 pounds.

The government also plans to offer cheap loans of up to 30 percent of the purchase price of a house for first-time buyers. Households earning less than 60,000 pounds a year will not have to pay interest for five years on the loans, providing they buy newly built properties.

For the most vulnerable homeowners falling behind on mortgage payments, the government says councils or social housing landlords can pay off the debt and instead charge tenants rent “at a level they can afford”.

All this is good news for housebuilding companies of course but what do you think of the package as a means of relieving the constipation in the housing market as a whole? Is it enough to get first-time buyers back on the ladder and alleviate the effects of hardship caused by rising prices?

Forget everything you’ve heard about the looming property crash.

In the midst of dire warnings about collapsing house prices comes a lone voice offering a crumb of comfort for hard-pressed homeowners.

A report by the National Housing Federation says that far from falling off a cliff, house prices could actually rise by a quarter by 2013.

It says demand for homes is rising because people are living longer, delaying getting married and are more likely to divorce.

Nearly 1.7 million people are on waiting lists for public housing and thousands of first-time buyers are saving up to buy a home, it says.

“As soon as the economic outlook improves house prices will resume their previous upward trajectory,” said the federation’s Chief Executive David Orr.

The Federation also says the supply of new homes still lags behind demand.

Not everyone agrees, however.

A report by Deloitte this week forecast that house prices will fall by a third and that the slump will last until 2010.

Inflation, shrinking incomes and the economic downturn will all take their toll, it said.

Where do you think the market is heading? Do you expect the price of your house to rise or fall in the next few years?

(updated on July 15 with news that Gillespie won’t join as chairman)

Alliance & Leicester had increasingly been looking like a takeover target and Spain’s Santander has taken advantage of 75 percent collapse in the mortgage banks’ share price over the past year.

The Spanish bank had made little secret of its ambition to expand in the UK banking sector following its acquisition of Abbey in 2004, having already sniffed round A&L last year.

The move shows Santander’s faith in the UK banking sector, the Daily Telegraph says, and that prudently written mortgages are still valuable. “Halifax-owner HBOS will take some comfort from that. As will the Government and the Financial Services Authority, who are fed up with rescuing or orchestrating the rescue of Britain’s troubled banks,” the newspaper’s banking editor Philip Aldrick writes.

But what about the shareholders?

To those who stuck with A&L throughout its share price downturn the deal is worth 317p per share - they will be getting one Santander share for every three A&L share that they own, plus a cash dividend of 18p per share - still significantly lower than the 12-month high of 1,170p.

They might be well advised to hold on to their shares. According to thisismoney.com, one of Alliance & Leicester’s major shareholders, Standard Life, has given clear advice to shareholders big and small: Don’t sell yet. “Santander wants to buy this bank on giveaway terms,” Standard Life warns. It predicts a higher counter-offer soon.

Significantly, as part of its 1.3 billion pound takeover bid Santander says it’s willing to fund A&L’s 42 billion pounds of mortgage obligations. With economists predicting a fall of as much as 35 percent in house prices from peak to trough, A&L’s reliance on mortgage business was a key factor behind its share price dropping 75 percent last year as the credit crunch started to bite in Britain.

Simon Maughan, analyst at MF Global, has told Reuters that Santander could use the deal to drive through economies of scale to boost profitability at Abbey, which is low relative to its other operations.

The FT’s Alphaville blog points out that apart from obvious cost synergies, Santander’s Emilio Botin wants to accelerate expansion at Abbey. Adding A&L would increase Santander’s share of the UK mortgage market close to 13 percent.

Bank analysts at Lehman Brothers say that Santander is likely to have been attracted by A&L’s 31 billion pounds in deposits, plus the prospect of extracting close to 180 million in cost synergies, the Times said.

On the executive front, one factor that might “oil the wheels” is A&L’s recent appointment of Alan Gillespie, a well-respected industry veteran to succeed the late Sir Derek Higgs as chairman, Management Today points out. “The choice of Gillespie (who A&L pinched from Ulster Bank) was widely seen as an attempt to steady the ship ahead of further write-downs,” the magazine says on its Web site.

It was announced late on Monday that Alan Gillespie would not join it as chairman next month as previously announced.