Persimmon has reported that reservations were down sharply and its forward order book is down from £1.3bn last year to £1.05bn, a fall of 19%. Other key performance indicators don’t make positive reading - cancellations are up 20% and visitors to sites are down 13%. The news confirms the woes of the property sector.

Despite the bad news coming from Persimmon, the company managed to record a 1% rise in profits for 2007, up to £585.1m. Whilst the number of houses sold fell by 5%, the average price increased from £188,129 to £189,558. Not surprisingly, Persimmon has a cautious approach to future prospects.

Research from Standard Life Bank shows that a growing number of people are choosing to ‘do up’ their existing home, rather than move to a new property.

With relatively high mortgage rates, the new Home Information Pack, moving costs, stamp duty and the all important hassle factor, it does make perfect sense to make the most of what you’ve got. And of course it can add significant value to your property.

Not only are people looking at renovating bathrooms or putting in a new kitchen, but are considering more sizeable renovations - such as a loft conversion or an extension.

So if you are looking to invest in property but don’t fancy buy to let or haven’t enough money for a commercial property, why not look a little closer to home?

The housing market continues to weaken, with the average house price in December falling to £184,469 from £186,009 in December. In fact only three regions in England and Wales showed an increase, the largest being 2.2% in the North East.

A report from the Land Registry is the latest report to confirm the weakening. It shows that annual prices fell by 0.4% in December bringing the annual growth rate down to 6.7% from 8.1% in November. This news is supported by date from the two largest mortgage lenders, the Halifax and the Nationwide, who report annual growth of 5.2% and 4.8% respectively.

Coupled with the fact that mortgage approvals are at a three year low, there is growing pressure on the Bank of England to cut interest rates in February. Lower prices and interest rates should mean canny investors coul pick up a bargain or two in the coming months.

The higher mortgage rates seen during 2007 made it increasingly difficult for would be house buyers to get on the property ladder. This has aided the buy to let landlords as more people look towards renting a property rather than buying.

Despite slowing capital gains, the average buy to let investment  will have yielded a 21% return in 2007, thanks to rental increases of 19%, three times 2006 levels. Even with such increases, renting still proves to be cheaper than buying, with the average rent being only two-thirds of the mortgage costs on the same property.