Jan. 28 (Bloomberg) -- U.K. home prices probably won't pick up until mid-2009, according to Instant Access Group, the country's biggest property investment club.

``If we get 3 percent growth this year, I would be amazed,'' said Chief Operating Officer Tony McKay, whose company offers buyers new properties at discounted prices. ``We'll probably have a year to a year-and-a-half of stagnation,'' the 45-year-old Australian said in an interview Jan. 25.

Instant Access has brokered the sale of 18,000 homes in the U.K., the U.S., Spain and Portugal since it was created in 2001. British house prices have tripled in the past decade, prompting private individuals to invest their pensions and savings in real estate and boosting the company's revenue to 25 million pounds ($50 million) in 2007.

Such gains have now come to an end. U.K. house prices fell for a fourth month in January, according to Hometrack Ltd., a London-based research group. The average cost of a home dropped 0.3 percent from December to 174,700 pounds.

Mortgage approvals dropped to the lowest in at least a decade in December as banks curbed their lending and higher interest rates deterred buyers.

To protect its profit margin of about 18 percent, Instant Access has reduced its workforce by 40 to 320, who source properties, broker financial services and run real estate investment seminars.

`Tough Market'

``The market's going to be tough this year,'' McKay said in the interview in his office in Kingston upon Thames, a suburb of London. The number of inquiries has fallen and customers are taking as long as 14 weeks to complete transactions, double the time it took previously, he said.

The closely held company, owned by entrepreneurs Jim Moore and Brad Rosser, drums up customers by offering free seminars to more than 800 British and Hong Kong-based people each week. About 10 percent of attendees sign up for a two-day, follow-up seminar costing 2,500 pounds, about half of whom make a purchase of properties marketed by Instant Access. Last year, the company clocked up 3,200 transactions involving new homes.

``There are going to be some great deals as house-builders suffer,'' McKay said.

Private landlords now account for about one home purchase in 10 and Instant Access claims to have helped 200 people become ``property millionaires.''

First Look

For a fee of 6,500 pounds, Instant Access offers clients residential developments before construction work begins. By negotiating with homebuilders, the company sells the properties at 10 percent to 15 percent below the valuation by an independent appraiser. In return, it charges a fee of 3 percent of the purchase price.

Taylor Wimpey Plc, the U.K.'s largest homebuilder, reported Jan. 15 that its order book dropped 19 percent, while rival Persimmon Plc suffered a 14 percent slump in orders. Homebuilder stocks in the FTSE 350 Index have declined by 43 percent in the past 12 months.

``We're getting more offers from developers than when the market was really bullish,'' McKay said. The rejection rate by his team that researches and analyzes the viability of a development has increased to 92 percent from 80 percent.

Property investment clubs like Instant Access aren't without their critics, who cite aggressive, get-rich-quick marketing tactics. Lenders, developers and real estate consultancies have all called for better regulation.

The clubs often attract novice investors, some of whom ``lack an understanding of the risks that such investments pose,'' according to the U.K.'s Financial Services Authority regulator. In May 2005, the government forced two of the clubs into liquidation on public interest grounds.

``We have our detractors,'' McKay said. He would support efforts to regulate property investment clubs and points out that Instant Access gives investors an eight-day ``cooling off'' period in which they can cancel purchases.

To contact the reporter on this story: Simon Packard in London at packard@bloomberg.net.

Last Updated: January 28, 2008 03:00 EST