Squatting has suddenly become hot property after news that a plot of land awarded to a tramp could be worth up to £4 million. Harry Hallowes, 71, has been dubbed Britain's wealthiest vagabond after being given squatters' rights to a 60ft x 120ft patch of garden in Highgate, North London, that he had camped on for 21 years.

He is the latest of a number of high-profile squatters to join the property-owning classes. Legal experts, however, stress that squatting does not automatically lead to ownership - far from it. They say that “adverse possession” - the process by which squatters become the new registered owners of land or property - has become far less likely since a recent change in the law.

Gary Webber, a barrister who runs the Property Law website, explains the implications of the Land Registration Act, which came into force in 2003: “If you're squatting, you can apply to be registered to be the legal owner after ten years now, rather than 12 years. But if the owner objects, you have to show not only that you've been in possession but that you also reasonably believed that the property belonged to you.” But for those ready to invest a decade occupying the right property the rewards can be great.

When Nik, Rob and Lucas, three would-be squatters, broke into a boarded-up house in one of London's up-and-coming suburbs on a winter's night in 1998, they just needed somewhere to stay. Posing as housing association officials, they had earlier learnt from neighbours that the original owners had not been heard of for years. This greatly improved their chances of avoiding eviction - the fate of the majority of squatters within weeks. The house had no electricity and was virtually derelict: all but one of the windows were missing, the kitchen had only a filthy sink and a sawn-off water pipe. Most of the stairs were missing, and the lavatory did not bear description.

The trio were evicted by police later that night but returned the next day, fitted a new front door and lock, and were in. It took six months to make the house habitable; 20 other squatters pitched in to help, including qualified electricians and plumbers. Ten years on, Nik and his friends have just become property owners, beneficiaries of the Land Registration Act. The Land Registry was unable to make contact with the original owners of the property when the trio filed their claim for adverse possession. So, after the regulation three months, they were awarded the Victorian terraced house. The property is worth an estimated £800,000.

The Empty Homes Agency campaigns to draw attention to the estimated 840,000 unused or abandoned properties in the UK and bring them back into use. “If somebody is careless enough to leave a property vacant and not do anything about it, then it's hardly surprising if squatters take it over. Good luck to them,” says David Ireland, the agency's chief executive.

And Nik's advice? “Squatting is hard work,” he says. “I've seen a friend of mine held by his neck by a big builder and I've had the police kicking the door down. You can't go into it thinking you might end up as the owner. You squat because you need somewhere to live.”

OWNERS' RIGHTS

Possessing the title deeds is not enough: holders of registered land must also assert their ownership. If they do not, a squatter who moves in without consent and treats the house or land as theirs for a qualifying period may file a claim with the Land Registry to become the new registered owner and acquire the property for nothing. This process is known as adverse possession.

The Land Registration Act, which came into force in 2003, reduces the qualifying time from 12 to ten years, but is more restrictive. The Land Registry will notify registered owners of any claim and give them three months to object.

If the claim is unopposed, the squatters automatically get the property. If the owner objects, the squatters have to prove not only that they have treated the property as theirs, but that they also reasonably believed it belonged to them.

SQUATTERS' RIGHTS

Squatting is not illegal, but breaking in to a property or causing damage is.

Most squatters are evicted within weeks after the owner gets a court order for possession. If squatters do not leave after this, they can be prosecuted.

Squatters need to keep records - bills, receipts, even dated photographs - to prove how long they have lived there.

The Land Registry processes all adverse possession applications for registered land or property, and is also responsible for notifying the landowners and anyone else who has an interest in it.

Contacts: wwwpropertylawuk.net www.emptyhomes.com

RENT-FREE LIVING

Sixteen squatters lived it up in Ingram Avenue, Hampstead Garden Suburb, in a nine-bed £10 million house with a pool, poker room and gym, until they were evicted last July.

Djabar Babai declared himself bankrupt in 1993 and stopped repaying his NatWest mortgage on his £250,000 home near Stockport. NatWest failed to meet the 12-year repossession deadline; in February Babai was awarded squatters' rights. Squatters have recently moved into an abandoned warehouse on the edge of the City, next to the junction of Great Eastern Street and Shoreditch High Street.

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