Despite the credit crunch leading to a slump in the property business across the country, interest is still high in the city.

To endorse the fact, development company Persimmon has vowed to continue ploughing cash into the city.

The company has chosen to build no fewer than seven different sites across the city, and has even located offices in Peterborough to plug into the demand.

Sales director for Persimmon Homes East Midlands Steve Matthews said: "Peterborough is fast becoming a property hotspot. Recent research has demonstrated that Peterborough is the destination of choice for purchasers in the east of England as it is a more affordable counterpart to Cambridge.

Homes in the city cost about £170,000 on average – considerably less than Cambridge which has an average house price of £300,000.

Mr Matthews said: "We have even located our offices in Peterborough, giving us a good level of familiarity with the city, as well as an acute awareness of what househunters are looking for in the area.

"We are therefore confident in the knowledge that we are able to satisfy demand with our range of homes across our developments in the region."

However, the company is postponing taking on any new projects until the housing market has settled.

Persimmon Homes East Midlands' managing director Adrian Evans said: "During the current economic climate, it is prudent business practice to regularly review all aspects of our operations on a region by region basis.

"To this effect, advice from the group board was circulated this week, in particular requesting all offices to re-evaluate work in progress and concentrate on progressing sold and contracted plots. In making sure that our business is in step with slower housing market conditions we will therefore maintain a strong position.

"It is very much business as usual around the country for Persimmon and, in the East Midlands region alone, we have 20 developments, seven of which are based in or around Peterborough, which are open as normal and ready to welcome our valued customers."

That cautious approach is being seen across the city with estate agents and developers noticing a shift from buying to renting while the mortgage market remains unsteady.

Sales and marketing manager at Optima property developers Heather Saville said: "Our sales have slowed down, but rentals have really picked up.

"We recently put 18 apartments on the market and 10 have already been snapped up. I think people can't really get a mortgage that easily at the moment.

"People tend to be looking to rent for six months to see what happens with the credit crunch, they're playing it safe at the moment. We have still got some developments going on in London and finishing off a couple in Peterborough.