A battered bowler hat has become the symbol of the bother at Bradford & Bingley, Britain's biggest buy-to-let lender now forced to go cap-in-hand to investors for £400 million of extra funds.

A more appropriate symbol would be a poky apartment in a newly built block - adorned by cedar cladding that is fast turning into a material resembling battered low-grade cardboard and located in an inner-city neighbourhood standing firm against regeneration efforts.

This is the kind of property bought at the height of the boom by many Bradford & Bingley borrowers who hoped to “flip” - to sell at a profit before completion. This plan was frustrated by the market downturn and the individual's lack of expertise in such matters. Bradford & Bingley's trademark bowler hat may suggest financial savvy. But none of this seems to have been shared with its novice buy-to-let borrowers who were not versed in the timing needed for successful flipping or equipped with the wherewithal to be an amateur landlord.

Some of these borrowers are now behind with their mortgages because they cannot sell, or find tenants. In a scandal which highlights the shortcomings of Britain's quota-driven planning-approval system, many recently erected blocks of flats were designed purely for speculators, not for occupants. The apartments in question are tiny and lack storage space; they are also often not close to facilities such as public transport.

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In June 2006, Bricks and Mortar reported on the risk that the over-supply of such undersized flats in Leeds, Liverpool, Manchester and Newcastle posed for the whole housing market. This brought an angry - and sometimes threatening - response from developers who preferred that we did not point out to readers the essentials of a good buy-to-let investment.

Fortunately, a great many investors avoided such properties and are now benefitting from the increased demand for homes to rent. Research by Professor Steve Wilcox of the University of York highlights the ever-greater difficulties faced by first-time buyers. House prices may be lower, but, for anyone not possessed of a large deposit, the cost of a mortgage is now 12 per cent higher than a year ago. As a result, around 40 per cent of young working households in London cannot afford homeownership; nationally the figure is 28.3 per cent. The popularity of buy-to-let, however, is providing accomodation for this priced-out generation. But the abundance of properties available - around three million, according to Professor Wilcox - means that they can afford to be picky, which is bad news for the massively overmortgaged owners of poky apartments.

But although they are failing to be landlords, it is possible that they could become hoteliers. Last week I rented for one night only an apartment in Salford Quays, Manchester, which was smartly kitted-out but a long-term proposition only for those who permanently live out of a small suitcase and have no other wordly possessions. City Centre Chic, a business that specialises in such serviced apartments, offers to take on properties that will not sell. But they will not countenance, say, a £350,000 apartment kitted out on a niggardly £1,000 budget, or not handy for public transport.

The problems of the owners of apartments that no one wants to buy or live in are now the problems of everyone, the cause of more expensive mortgages for even the creditworthy and a blot on the urban scene. Cedar cladding peeling away from the facade of an empty block of flats is a symbol for a failure of the planning system for which we are all paying.

A rebuild for Bricks and Mortar

"The best sells, the rest sticks,” is Phil Spencer’s summary of the state of the market. Spencer is best known as co-presenter of Channel 4’s Location, Location, Location. But when he is not helping Kirstie Allsop appease unrealistic buyers, he is employed as the chief executive of Garrington, a property search agency.

This view is supported by estate agents such as Kinleigh Folkard & Hayward who say that correctly priced properties which comply with the “location, location, location” dictum can sell within two weeks. One family from Surrey found a buyer within four days for their £975,000 house.

Hyper-competive people may find this contest in which a house is tested on its every aspect strangely compelling. Others are choosing a different challenge: home improvement — which has now has added risk as a result of the 20 per cent increase in the cost of everything from basement conversions to the replacement of roof tiles. This rise can be blamed on the surging fuel and material prices.

The latest winning tactic in domestic makeover sport is the wine cellar: a spiral staircase leading down to the racks holding your collection of Bordeaux and Napa Valley is installed in a hole dug into your kitchen floor.

The Bricks and Mortar team (a Type-A personality squad) could not be left out of the refurbishment trend. Today we are unveiling our new look, but our mission statement remains the same: to give you the facts, figures and fantasies about the world of property.

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