Autumn Property Survey: Smuggling tales help the sales pitch: Lynne Curry goes west and finds that rapid price rises are a fable

Rinsey Head, a substantial Thirties house dramatically sited on a Cornish granite outcrop into the sea, has 27 acres of land and a small private bathing cove said to have been used in the 18th century by an infamous smuggler, Harry Carter, whose romantic alias was the King of Prussia.

Cornwall is the land of legends and if a property can lay claim to its own - or at least a part-share in one - it will be mentioned very high up the sales pitch when it goes on the market. The smuggling story may help Rinsey Head, on sale through the Penzance office of Stratton Creber, to achieve its guide price of pounds 350,000, but comparatively few homes in the south-west have a legend as an asset.

With the exception of outstanding properties in the most beautiful areas, often by the sea and coveted by incomers with plenty of money, prices remain depressed. But they are nevertheless creeping back up from the plunge of winter 1992, when they reached their lowest value in the slide from 1989.

According to the Halifax building society, whose quarterly house prices report came out this month, the south-west is faring better than most regions, where prices have fallen. An average house is now worth 0.7 per cent more than it was last autumn, and prices have been gradually rising all year.

The average price of a house in the region is now pounds 62,687, slightly higher than the West Midlands. Houses are cheaper in every region except Greater London and the South East.

Of the principal towns and cities, Cheltenham remains the most expensive with an average sale price of pounds 72,150. Bristol follows with pounds 61,100 and Swindon with pounds 57,350.

A less optimistic picture comes from the Royal Institution of Chartered Surveyors, which says that there is little prospect of any improvement either in prices or sales numbers this year. One Bristol estate agent said that he had been asked by more than 30 vendors in the last three weeks to reduce asking prices.

As the recession refuses to release its grip on the house market, the south-west is typical of an emerging pattern: the most desirable houses are also the least affected. Handsome amounts of money, often cash, are still exchanging hands for the sort of homes that evoke fantasies - and the south-west has many of them. Only the shrewdness of the buyers, many of whom have made their money in business in less attractive parts of the country, keeps a lid on the asking prices.

Those who still have to work for a living are much more cautious about moving, lacking confidence in the region's jobs market. In Cheltenham, sales figures have been shaken because of the high number of companies which supply the aerospace industries.

Further down the country, a promising summer has given way to a flat autumn.

Mike Saunders, managing director of Fulfords' 26 branches, all in Devon, said the consensus was that figures would not beat last year's. 'In September we noticed a significant downturn and we sold an identical number of properties as last year. There has been very little change on prices; so marginal it's almost unmeasurable. At the expensive end of the market, properties with a sea or river view or anything that's a bit special are still doing well. There is always a demand from other parts of the country.

'The market isn't a disaster at the moment and I wouldn't want to give that impression. From our point of view, after an encouraging June, July and August it was disappointing to see that the level of sales went back to where it was in September last year. What has actually happened is that as a result of interest rate rises there has been a blip, but I feel it is temporary.'

Andrew Harvey, residential stales manager for Stratton Creber in Penzance, said the same pattern had emerged. 'Overall, the year has been good, but since interest rates went up, it's as though someone has shut the door and the number of inquiries has tailed off.'

Prices throughout the region are still way below their peak in 1989, a factor which continues to hinder the market. In Bath, traditionally a high-value area, luxury flat conversions continue to be worth much less than they were bought for. At the current halting rate, it could be years before a one-bedroom conversion with a desirable address is back at the pounds 100,000 it was bought for, having plummeted to about pounds 65,000.

But at least the south-west is on the right side of the current north-south divide (excluding Scotland, where prices are rising), even if only temporarily. The Halifax says: 'In very broad terms, over the past 18 months or so house prices in the north appear to be on a gently falling trend. In the Midlands and East Anglia they appear flat, and in the South the trend is slightly upwards. However, the contrast is neither large enough nor prolonged enough to be indicative of a return to a north-south divide.'

(Photograph omitted)