Some think that buying into the ailing London market could prove fruitful while others say it would be akin to catching a falling knife, writes Angela Pertusini.

OF COURSE there have been rumblings of impending doom for some time in the commercial property sector.

First, last March, with some prescience, Gerald Ronson of Heron International told investors, "there will only be one ending" to the then-overheated market.

"We will look back and talk about how obvious the signs were," the tycoon noted gloomily.

A couple of months later, Invista chief, Duncan Owen, said: "It is . . . a negative equity situation in commercial property. We think there will be a big market from sellers in 2008 and 2009."

Full marks to both these oracles but one of the bigger property funds has neatly side-stepped the issue of panic selling by freezing accounts over the past week. Shockingly, in the past week, Scottish Equitable has stopped investors from withdrawing money to stop, one assumes, the complete collapse of the fund - more than £500 million (€670 million) had been withdrawn - and it is rumoured that other funds such as Scottish Widows and Axa may be about to follow suit.

Throughout the City, sentiment remains not just depressed but damn near suicidal: Morgan Stanley predicts up to 50 per cent being wiped off values and even the most optimistic of statistics favours a 5 per cent drop in central London rents. It was all going so well. Not since the heady days of Carnaby Street had London enjoyed such good press: it was the financial capital of the world; from Dublin to Dhaka investors were falling over themselves to grab a corner of it.

But, once the sheer, hip-shaking grooviness of owning a stake in London wore off, there were those that began to question that at just a 4 per cent yield, might they not be better putting their money in a deposit account?

London's ambition to create a Manhattan-like cityscape seems to be under threat in the current climate - there are whispers that Renzo Piano's 50-storey Shard of Glass may not be built and investors wait to see what will happen to more than 600,000sq m (7 million sq ft) of office space due to become available in the coming year.

Some of the more adventurous advisers are urging clients to buy in this more affordable environment but the Guardian quotes the old City saying: "Don't try to catch a falling knife." Ow.

Commentators made a great show of national back-patting last year, each congratulating the prudence of British lending institutions for not falling into the US pattern of sub-prime mortgages.

It is true that sub-prime is something of a niche market over here but "self-certification" mortgages - ones in which no proof of earnings is required - are not.

For some reason, although everyone knows someone who earns peanuts but has been offered a pearl-like self-certified mortgage through a series of nudges and winks from an independent financial adviser, it seems that no one has thought to class these loans as sub-prime.

But according to the Intermediary Mortgages Lenders Association, they accounted for 10 per cent of all mortgages in 2007 and, together with actual sub-prime loans, made up almost 20 per cent of applications and, quite possibly, a far greater proportion of the money advanced.

Last week I noticed a flat on my street had a For Sale board outside it so, naturally, I sprinted home to log onto one of the property websites to find out how much they were asking. The owners want £540,000 (€723,000) - but also listed on my street are two other flats for £545,000 (€730,000) and £600,000 (€804,000).

I had a close look and then went back into the road to find those two - no sign of any boards. I waited a few days, still no sign of them. So then I started to look at surrounding streets on the website and, sure enough, there are homes for sale peppered throughout the neighbourhood but absolutely no evidence of any advertising.

I'm not quite sure what this trend implies: a certain shame at trying to cash in on one's assets - I think of dowager duchesses finding discreet middlemen to dispose of their tiaras.

Or perhaps it is a reluctance to let your neighbours know how undesirable your home is: "Still on the market then? No offers? Not even any viewers? Oh, what bad luck."

Estate agents are usually desperate for the advertising a board brings - to the extent that there are regular outbreaks of agency turf wars where they all go out knocking each other's boards over in the middle of the night and even pay for boards to be put up outside homes that aren't for sale or to let (advertising school fêtes and so on beneath their corporate branding).

Sellers are obviously demurring, however, and for the time being, the For Sale board is the badge of the bold.