A former public lavatory in Fulham, West London, fetched £403,000, four times its guide price, while a cemetery lodge in Hammersmith, once home to those who dug the graves, went for £344,000; its guide price was £275,000.

But these intriguing sales were not the most noteworthy aspect of a property auction in London this week. Nor was the reluctance of the buyers of both of these properties to talk about their plans for these rather average examples of municipal architecture. If you had a vision of how a loo could be a cool bar café, wouldn't you wish to get some buzz going at a time when the party crowd are more minded to stay in than go out?

Other people attending the auction, however, were more forthcoming, giving an insight into how people feel about property in the week when the housing market numbers were simultaneously reassuring and scary.

Mortgage approvals, a closely watched indicator of the property market's prospects, rose slightly and there was a slight dip in Libor (key to the cost of fixed-rate mortgages) amid hope that the base rate could be slashed to as little as 1 per cent, or even 0.5 per cent.

But more economists predicted further house price falls and there was an increase in repossessions to 18,900 in the first half of the year. This may represent just 0.16 per cent of 11.74 million mortgages outstanding. But it is still a troubling trend.

The 300 people at the Savills auction were not in denial about the state of the market. Nor had they come to rubberneck or gloat at the misery facing repossessed households whose homes sell for less than they owe to their mortgage lender, leaving a debt for which they can be pursued for 12 years.

Some of those present at the auction were observers, persuaded that property was a decent long-term bet - a stance evident at auctions throughout the UK - but wary of a precipitative move that could turn into a long-term blunder.

Others were eager to bid now for the kind of bargains likely to be available next year as the recession takes its toll. An agreeable family house in Penge, southeast London, was picked up for £351,000 - about £50,000 less than the price at which similar properties in the area are changing hands through estate agents.

There were a few first-time buyers at the auction, drawn by such opportunities as a £125,000 studio flat close to the deeply hip Borough food market in South London. Yet for this group, buying at auction holds more risks than the embarrassment of raising your hand at the wrong moment in the kind of comic blunder so loved by Carry On scriptwriters.

There would be nothing knockabout in the problem confronting a first-time buyer who had snapped up a great deal only to have a previously approved mortgage offer snatched away by the bank. Would any bank be that mean? Right now, the answer is still yes.

No excuses now

The latest house prices indices from the Land Registry and Nationwide provide a compelling argument for further base-rate cuts. Nationwide's average house price is now £158,872, down 14.6 per cent since October 2007. This may still be £30,000 more than five years ago, which is some comfort, but scarcely a reason why interest rates should not be reduced further - as soon as possible.

Prices continue to fall everywhere, except in Hartlepool, where there has been a 4.6 per cent annual increase to £115,018, according to the Land Registry. A Land Registry spokeswoman could not provide any reason for this, as the organisation collates rather than interprets the figures for transactions. But, again, this statistical oddity should not be used as any excuse to postpone a base-rate decrease.

Data from Moneyfacts show that the average tracker mortgage rate is now 6.27 per cent - higher than a year ago, despite base-rate cuts in the interim. This illustrates how banks have found every excuse not to pass on the benefit of lower borrowing costs to homebuyers. Tolerance levels for this behaviour are now falling far faster than property prices in any neighbourhood.

Your pub, your rules

There are some risks associated with the purchase of this week's pictured property, but not the sort you might expect. The owner would have to be prepared for endless comments about incipient dipsomania and constant repetition of the catchphrases made famous by the comedian Al Murray in his Pub Landlord guise (such as “My pub, my rules” and “Pint for the fella, glass of wine/fruit-based drink for the lady”). For this £2.5million three-storey flat in Limehouse, East London, (pictures) for sale with Cluttons, comes with the freehold of Bootys, the pub downstairs, which is let until 2015 for an annual rent of £23,000.

Propping up the bar - listening to yet more lame witticisms about whether it would be possible to be banned from your own boozer - need not be the only way to pass the time, however. The flat's terrace overlooks the river.

anne.ashworth@thetimes.co.uk

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