As you may know, house prices fell in August according to the Land Registry index. Mortgage approvals also fell in August. We have warned for some time on this blog that the price rises we were seeing in the past few months did not represent a bottom in the market, and now it looks like we are finally going to be proved right.

The house price rise was easy to brush aside, because we knew it was based on short-supply in only a few areas. However, the rising mortgage approvals growing month on month and even showing massive hikes on last year's figure was hard to argue with -- even though the rises still left mortgage approvals a lot lower than you would expect to find in a market where prices are rising.

Now, the reality that we are facing is this: The Land Registry says prices fell in August, but its index is lagged by 2-3 months. That means that house prices were struggling even when mortgage approvals were rising.

Now that things are heading south again we say: buckle up, this is the start of the second dip we have been forecasting for some time, and we are in for some pretty sharp house price reductions in the coming months.

This doesn't mean that you can't sell your house. As we have said on this blog before, all houses are falling in value, so by the time you sell your house at a reduced price, and buy your new house at a similarly reduced price, you will be in about the same boat as you would in 2007.

You may have read my comments that I made on Write About Property yesterday, on predicting the future of UK house prices.

In it, I agreed with the author of the post Liam Bailey's opinion, that UK house prices still haven't stopped falling, there is still too many things capable of pulling prices down: constricted mortgage market, unemployment and foreclosures are the big three, but there is also vendor realism and negative equity affecting thousands.

When I was talking to Liam he told me about a new article he is planning to write, based on a survey of landlords about their forecasts for UK house prices. So far, of the responses he has received so far, many of the UK's buy to let landlords think that house prices have some way to fall yet, with forecasts ranging from next Easter to 2014 for when the recovery will start.

Of course if you listen to the industry bulls the recovery is well underway. As Liam covered, the major indices certainly support this view; all of them are showing house prices rising on a monthly basis for most of this year, and according to Nationwide prices are now just 2.1% lower than they were a year ago.

Here at Zungalow, we don't really care what house prices do because it should never stop people from selling their house. This is because -- as we have pointed out in previous posts -- all house prices are falling. So, while your house will sell for less, you can buy your next house for less as well, and end up coming out of the deal exactly the same financially.

Zungalow allows you to sell your house for £29 per year, at that price can you afford not to give it a go with Zungalow.

Property investment consultancy Assetz have slammed the forecast that UK house prices would fall 9.8% by the end of this year made by the Confederation of British Industry.

Stuart Law, chief executive of Assetz, said: "The CBI’s house price forecast is illogical and cannot possibly be based on justifiable calculations.

"All the major house price indices are now showing consistent month-on-month growth and Assetz House Price Watch, which is based upon the UK’s main five indices, is now showing that house prices are over 1.5% higher than in January this year.

"It would be virtually impossible for house prices to fall by almost 10% in the three months to the end of December and it is hard to imagine how the CBI arrived at this figure, which implies a greater rate of fall than was witnessed even in the state of panic last year.

"More worrying is the fact that this prediction is clearly at odds with the CBI’s own view in their release that the economy as a whole is gradually improving. Random sound bites such as these are unhelpful in this sensitive market which is beginning to find its feet."

Assetz are a bit wrong in their own facts. Yes, all the main indices are currently showing month-on-month and even tri-monthly growth, but there is not only 3 months left. The three most current indices, namely Halifax, Nationwide and the Financial Times are up to the end of August, giving them 4 more monthly releases to end the year. The indices of the Land Registry and the (government) Department of Communities and Local Government, are only up to the end of July, giving them 5 monthly releases to go.

Falls of 2% or more now when -- as Assetz rightly pointed out -- the economy is showing signs of recovery, look highly unlikely. But even though the economic outlook is a lot brighter, unemployment is still rising, foreclosures are still happening, and we aren't out of the woods yet. In fact, house prices are only rising because of big rises in 11% of the country were supply of quality homes is extremely short, prices are still falling everywhere else. If foreclosures should mass or something else should cause supply to increase in those areas, then house price falls will restart anew and 1.6% per month could happen, though even I have to admit it is unlikely.

Liam Bailey is a well known commentator on global property markets, and the director of SEO copywriting services company Write About Property.

It has been revealed that Halifax's valuing system for mortgages is leading to people paying higher rates because their properties are being undervalued.

The Times broke the story on the Halifax undervaluing property by up to £35,000, which potentially adds £12,000 to the cost of a mortgage.

The article featured the story of Simon Lord, 49, an estate agent, and his wife Katherine, 44, from Bath.

The couple came to the end of their mortgage with Halifax in July, and their house was automatically valued. The Halifax valuation, based on its index said that the Lord's had 25% equity in their house.

Unhappy with the figure, the Lord's paid £1,000 for Halifax’s own surveyor, Colleys, to visit their property for a physical valuation. This turned out to be 35.6% higher, at more than £1m, giving them the 60% equity required for the top deals.

“We would have had to acquiesce to a far less favourable mortgage if we’d accepted Halifax’s initial valuation,” said Lord.

Halifax said it updates its index every quarter for valuation purposes. This penalises home owners when prices are rising, though benefits them in a falling market. A spokeswoman said: “We’re confident that we have a robust process in place.”

This story adds even more weight to the advice we have been giving for several months now, people need to be carrying out their own valuations, even if they are using the services of an estate agent. This way they will know if someone is either undervaluing or overvaluing their house.

Find out how to value your own house in our How to Sell Your House guide.

In August, the average UK house price was £112 higher than in December 2008, meaning that house prices have now regained anything the lost in the falls of the first quarter, according to the latest release of the Halifax house price index.

The average price of a UK house was 0.8% higher in August than in July. This was the second consecutive monthly rise recorded by the Halifax, and the fourth rise in the last 8 months. The rise brought the tri-monthly measure (widely regarded as the more-accurate because it is less volatile) to a rise of 1.7%, and the annual measure to a fall of 10.1% -- the lowest since July 2008.

"Demand for housing has increased since the start of the year due to better affordability and low interest rates. This, together with low levels of property available for sale, has boosted house prices over the last few months," said Halifax housing economist Martin Ellis.

With every month that house prices continue to rise, confidence builds and more and more people are willing to put their voice behind this being the start of a slow and painful recovery in UK house prices.

Whether it is or not; find out how you can do just as well in a down market as you can during boom times.

The UK housing market has bottomed, price falls have finished, and price growth, though slow will return next year. That is according to a survey of 30 analysts conducted by Reuters, who said that prices will end the year slightly lower than they started it, grow by 0.5% next year, and 2.5% the year after.

The UK is absolutely obsessed by house prices, but it is all much of a much-ness; if you have the right attitude you can do just as well out of the current housing market as you could in 2006.

There are people who are refusing to sell their houses because they won't get the peak price for it, even if they bought the house years before and could still make a profit at a 30% discount on peak, they are sitting on it, depressing and waiting for better days.

The fact of the matter is, house prices are relative. That is to say, all houses are falling in value, so by the time you sell up, remortgage and buy the bigger house your family needs, you will end up paying the same amount in mortgage repayments as you would at the peak in 2007.

Because, while you would have got a lot more for your house then, the bigger house would have been a lot more expensive also, and vice versa, now, the bigger house is a lot cheaper. And the same goes for people who want to downsize; yes, they lose out on the sale, but the smaller house will also be cheaper and they will come away with the same amount (approximately) left over.

So, in answer to the question: is now the time to sell your house? Yes, now is the time to sell your house, because it is no different to any other time.

By Liam Bailey

Right, so let me start at the beginning.

Firstly, I believe that, though the collapse of the global financial infrastructure was the catalyst, that this house price correction is like any other in the fact that it has gone the way it has because homes became overvalued and unaffordable for first time buyers.

Some people believe that house prices will fall until the average house price is 3.8 times the average salary. I am not one of those people. I believe that this correction will go much the same way as the last correction (late 80s early 90s) and overshoot the long-term averages on the way down.

House prices have been rising for the past few months. The rises are not a true reflection of the market. Short-supply of quality homes in certain areas is causing those properties that are available to be sold for prices similar to those seen at the 2007 peak, and these sales, in a measure of low transaction volumes are enough to distort the overall picture.

Prices are still falling in most places. And they will continue to do so until transaction volumes pick up, so the true question is, when will transaction volumes pick up. There are three hurdles keeping transaction levels down.

1. The Economy/Unemployment

   Though there have been signs lately that we are past the worst of the recession, unemployment is still rising, and is expected to continue doing so for quite some time yet. Until less people are in fear of their jobs or already jobless there won't be sufficient demand for a revival in transaction volumes.

2. Mortgage availability:

   Banks are still under pressure to improve their balance sheets which means making more money from fewer loans. To consumers this means poor deals are on offer to anone who has less than a quarter of the house price to put down as a deposit, and the best deals go to those with deposits of 40% or more

3. Vendor Realism:

   It is a fact that short supply is driving up prices in some areas. But across the UK out of the homes that are for sale, a high percentage of those homes are at prices similar to those seen at peak. Thus, actual saleable stock, that is houses that people will actually buy is short across the country. The correction can't end until the gap between what buyers are willing to pay, and sellers willing to accept closes. This can't happen until more vendors are realistic about the market.

When the global economy has recovered, and stock markets and investments around the world are once again lucrative, when UK consumers are spending and borrowing healthily again, the banks will be making money sufficient that tight mortgage policies are not the only way to improve their balance sheets.

That will take care of number 1, and as a result better mortgages will become available to the masses, which will take care of number 2. This will then result in number 3 resolving itself, because demand will begin to increase and vendors will realise that it is only their price that is preventing the sale.

But as this is a forecast, what you really want to know then is, when do I think the global recovery will happen?

As I said, there are clear signs that the UK is past the worst of the recession, and there are similar signs that the recessionary down-track is passed and we are currently on the way back up, things like: GDP contractions of a lot less than previous quarters, retail sales up (in the EU), Europe's biggest two economies emerging from recession, and more.

I think that the global recovery will be strong in Q3 of next year, and that UK unemployment will also have turned around by this point. It will take time for this to change the attitudes of consumers and the banks, but banks should be more relaxed about their lending, and demand to buy property will start to increase by Q2 2011.

I therefore think that the UK housing market will bottom between quarters 2 and 3 of 2011. Unlike other commentators I think that price growth will be quite brisk in the subsequent few years.

Liam Bailey is a well known property commentator and director of sector specialist SEO copywriting company Write About Property, which provides SEO copywriting services for some of the biggest names in the property industry.

I was interviewed for online property publication Write About Property yesterday, to see whether I thought now was a good time to be selling UK property. The title kinda gives away my answer; Now is the Time to Sell Your House, C'Mon Quick.

I'll tell you what I told them:

If you have a good property in a good area, now is the time to sell, and I mean right now. Short supply is driving up prices and you may even get close to peak value if you can get your property onto the market before supply of like-for-likes increases in your area, before everyone catches on if you like.

So how quickly can you get your property on the market, with Zungalow you can do it in 10 mins. You're thinking, but ah, first you need to get your home information pack. That's true, but Zungalow allows you to put your property on the site to show it off, neither for sale or rent, and for free. Then you will be shopping around not only to find the best price for your HIP, but also the company with the quickest delivery time.

Once you have your HIP, simply pay the £29 up your membership to silver, add pictures and mark your house for sale. Click here to find out how to value your property online for free.