THERE IS apparently still plenty of mileage left in the old saying that when America sneezes the rest of the world catches a cold.

And it appears that the normally staid and conservative French banking establishment just couldn't resist taking a punt on the easy money to be made in the sub-prime mortgage fiasco.

The French banks are very strict with their own citizens, only lending an amount that is a fixed percentage of the borrower's monthly net pay. No five-times-your-gross-income, interest-only, pay-it-back-over-50-years nonsense. But unfortunately, like a great many prudent and sensible people, they lost their heads when they went abroad. One whiff of the stars and stripes and they couldn't give their money away fast enough. Our money, to be more precise.

The upshot is that the new lending rules for the French first-time buyer are what should have been the applied to the trailer trash stateside (is that cultural racism?). The banks are now requiring a 20 per cent deposit from new buyers - a classic kneejerk reaction that has sent the new housing market into freefall.

When you couple that with a UK pound that is nearing parity with the Euro, where it used to be one-and-a-half times the Euro, you have an impact on the UK ex-pat buyer that looks like a formula for putting your average builder out of business.

I was chatting to Monsieur Fournier the groundwork boss the other day because I need a new septic tank on my latest project, and I made the customary enquiry about his workload. In the five years that I have known him, this question is always greeting by much huffing and muttering about being débordé or literally flooded with work, but for the first time he declared things to be calme.

For his team of 20 or so ground workers to be quiet rang a horrible bell in my head. I remember all too clearly in the early 90s working on a large site where the ground workers were laid off, followed by the brickies, then the plasterers, then the chippies and so on. I would like to think that it isn't happening here, but I am afraid that it is. The chap from the hire shop confirmed my fears as he surveyed a shop full of equipment which should have been out on a site somewhere.

How is all of this affecting me? Well, having seen the clouds gathering some months ago, I have managed to sign up a couple of big contracts that should see us through to the middle of next year, and with a little careful housekeeping we may be able to weather the storm. But is there any good news in this tale of doom and gloom?

Yes there is, if you happen to have a few quid stashed away, then a downturn is a great time to spend your money. The market is flooded with houses of all sorts for sale, from bungalows to chateaux. What was a strong sellers' market has done an about turn, and with a strong nerve and a bit of tough negotiation that bargain house with a swimming pool in the sun could finally be yours. Just make sure that the builders finish it before they go bust...