Professional investors who bought more than one property were securing discounts of 30 to 40 per cent from these developers. However, house-builders did not want to admit this publicly, Mr Law said.

'It is prevalent. It is something they (developers) would say wasn't happening to an individual buyer who walked cold into their office. But we are doing it for our clients,' he said. 'The stock overhang of these developers and their need to raise cash have created this artificial market. It is all about developers becoming distressed sellers.

'Vulture buyers are taking whole blocks and this will last until March next year. At that point there will be no more distressed product left.'

The discounting was taking place across Britain but was steepest in Wales, northern England and Northern Ireland. Examples of developments where big discounts were available included a set of two-bedroom apartments in Liverpool which were previously marketed by their developer at GBP120,000 (HK$1.41 million) each and were now available for #68,000 - a 43 per cent cut.

At an east Manchester development three-bedroom houses originally offered at #200,000 each were on sale for GBP125,000, Mr Law said.

Hong Kong investors are among the buyers. Between 10 and 15 per cent of Mr Law's clients came from Hong Kong, a fourfold increase from six months ago, he said, adding they considered British property a secure long-term investment.

Steve Turner, a spokesman for the Home Builders Federation, gave no comment on whether discounts of 40 per cent were offered by his organisation's members, but confirmed that developers were 'having to incentivise buyers in the current market'.

Other property professionals say discounts are being agreed but 40 per cent cuts were rare.

'We've heard mention of it but it is quite hard to establish how widespread it is,' said Royal Institution of Chartered Surveyors housing spokesman Jeremy Leaf.

'However, it is probably not quite as prevalent as we have heard. In places like Nottingham, Leeds, Manchester and Birmingham, where there has been a lot of supply of two-bedroom city centre flats and developers are in a desperate situation, then they will look for desperate measures.'

In London, Russell Hunt, managing director of home finders Property Hunt, said unfinished shell apartments were selling for 20 to 30 per cent less than completed homes at small developments.

However, there were few 30 to 40 per cent discounts negotiated on completed projects, he added.

Robert Hadfield, the managing director of investment property management company Pineflat, said developers might offer big discounts next year. He advised investors to wait for prices to go lower before entering the market.

Some developers planned to put large numbers of properties to auction soon, he added. 'I think that we will see a lot more of this sort of thing as developers try to reduce inventory and get some cash flowing.'