The UK housing market is "past the worst" according to foreign exchange company Moneycorp. In an interview with Write About Property, David Kerns, dealing manager in the Moneycorp private division, said:

"Housing, data at the moment would certainly confirm that the UK housing sector is, certainly past its worst, and we've seen about 5-6 months now of growth in UK housing."

His statements come just days after the government index run by the Department of Communities and Local Government came out showing a 0.5% increase on the month of August, and a 2.7% increase on the quarter.

The interviewer, Liam Bailey was silent for the first time in nearly the whole interview. This is because, Liam believes like we do here at Zungalow that there is a second dip on the horizon for UK house prices.

That is, we did believe it, but every time an index that we trust; an index with no commercial interest in creating positive sentiment comes out showing continued growth in UK house prices, we doubt ourselves just a little bit more.

I mean, David Kerns sounds old enough to have analysed more than the current recession, and he has his finger on the pulse of the shocking employment figures the same as we do, but he truly thinks the housing market is past its worst, strongly enough to base currency dealing decisions on it.

That said, as Kerns admitted in the interview: housing is not crucial to making forex calculations at the moment, because all the other data is and will keep Sterling low, and things like rising unemployment and quantitative easing need to be stopped before Sterling can really grow. So he has no reason to analyse the housing market at the same lengths as we have and will continue to.

As we always say, though we love to follow house prices, they really are not all that important. Firstly the national average is very rarely found on any British street or area, and secondly all houses are falling in value so in most cases the money you lose in selling you will gain in buying.

So, why not give it a go while the going's good; sell your house with Zungalow for just £29 per year.

The Financial Times index, one of the most impartial and arguably most accurate indices of UK house prices recorded a 0.6% increase in house prices in September. UK house prices are now 5.6% lower than they were at this time last year, and at similar levels to August 2006.

The FT index is compiled by Acadametrics, which said that this, the fifth consecutive monthly rise in house prices clearly indicates a recovery, but that things could still turnaround at any minute. Peter Williams, chairman of Acadametrics said:

“Consumer confidence is recovering and there are indications that mortgage supply has stabilised and might increase along with the number of properties coming to market and the transactions that follow. However, all this is delicately balanced. The government and the Bank must continue to make the right calls to avoid disrupting this fragile recovery and it is simply too soon to say the course going forward is set.”

The Acadametrics/FT index is a good one to follow, because it is not based on mortgage approvals like those of Nationwide and Halifax, it is based on actual transactions recorded in the Land Registry, but it is better than the Land Registry index because it continually adds the most recent sales recorded at the Registry, and the index is constantly updated with the changes.

For that reason, we can look at this and say that the Land Registry index for September will show prices rising again after the fall in August. I have been saying since the Land Registry index came out in August that it wasn't a blip, it was the start of the second dip, bla bla bla. Looks like I was wrong.

However, with unemployment still rising, the mortgage market still heavily restricted and supply alone holding up a market in which first time buyers still can't afford to buy, I still think a second dip is inevitable in the short term.

Like this post, Subscribe to our feed. If you want to sell your house while prices are rising, do so with Zungalow for just £29 per year.

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.

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.

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 Land Registry has just released its data on UK house prices in July.

Not surprisingly in the current climate, the Land Registry too has recorded an increase on a monthly basis, in fact the largest increase since 2004 of 1.7%. This has brought the annual rate of decline down to 11.7%.

The Land Registry house price index is widely regarded as the most accurate record of house prices in England and Wales, is showing the annual decline still much faster than the 6.2% recorded by Nationwide last month.

The Land Registry index also showed that there were on average 35,348 property transactions per month between February and May, just over half the 61,743 recorded per month in the same period last year.

As transactions had already plummeted last year, this proves beyond a shadow of a doubt (as far as I'm concerned) that the reason behind the price rises of the moment is not increased transactions because of low interest rates, as Nationwide said yesterday, but the low supplies of saleable stock. (See yesterday's post on the Nationwide index for August).

Pricewaterhousecoopers have cautioned that UK house prices are likely to see further falls this year, to continue falling next year, and recover very slowly after a largely flat year in 2011.

Steve Denison, PwC Northern chairman said: "Although the estimated average UK house price overvaluation of around 25 per cent in mid-2007 has now been largely eliminated, our analysis suggests that house prices could still have further to fall over the next year.

"Despite some recent reports of rises, we are not out of the woods yet by any means. It is important for buyers to take a long-term rather than a short-term view.

"The pace of recovery in house prices seems likely to be relatively modest until the middle of the next decade, although it could pick up again beyond that as supply shortages re-assert them-selves, credit conditions return to normal and negative memories of the current housing bust fade."

There has been a lot of positivity in the industry press of late, after all the major indices began to show the annual rate of house price decline slowing significantly, and the indices of Halifax and Nationwide began to show consecutive monthly rises and even quarterly growth.

We have been cautioning on this blog that the current upward pressure on prices was fuelled only by supply shortages and that we were highly vulnerable to further falls in the near future. This from the well respected Pricewaterhousecoopers is one of the starkest reports on the future of house prices that we have read for some time.

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As we all know, there is currently a lot of positive news in the housing market, with prices rising on a monthly basis for some months now according to some indices, by 2% since April according to the Halifax and Nationwide, and all indices including that of the government showing the rate of decline having slowed massively.

But as we all also know, this current reversal of the downward trend has not been caused by a massive upsurge in activity like you would expect if the market had bottomed, but is in fact based on a marginal increase in activity, which has acted in conjunction with a massive supply short-fall to put upward pressure on prices.

The trouble with that is, if supply increases faster than demand, the upward pressure on prices will evaporate and we will likely be in for further sharp declines as the actors putting downward pressure on prices, like the restricted mortgage market and soaring unemployment, are able to take their full effect.

Such a scenario would seem likely; as the positive news could well make the thousands of people holding their property off the market think that now is the time to go for the sell. With that threat seemingly hanging over us guillotine-like, it is easy to focus so completely on it to become blinded to any other possible outcome.

But is the positive news likely to make the holders sell now? When you think about it calmly the answer is no, not really; these people don't want to sell because of the losses they face on their property, the 2% increase barely bites into the 20% loss we have seen so far.

On the other hand: who wants to buy a house if it is going to lose even 10% of its value within a year, let alone the 40% falls some analysts were predicting a few months back? So it is surely equally possible that the currently positive news -- that has made even the likes of BOE guy say that the worst of the price falls are over -- would bring more buyers into play?

If the number of buyers was to increase greatly, faster than supply increases, which is possible if not likely, then this will increase the upward pressure on prices and accelerate the price rises and slow the rate of decline faster.

In this scenario, this continuation of price growth would indeed see supply levels start to increase, and this would be the beginnings of a sustained recovery in the housing market. The recovery started by shockingly low supply, well it's got to start somewhere.

Of course there are three very big problems, namely:

1. Unemployment is currently massive and still rising
2. Banks are still being very cautious about who they lend to (especially who they lend 125%LTV to)
3. Vendors still are not being realistic about their asking prices, according to Rightmove's latest index the average asking price of new additions to the site is 40% higher than the average Land Registry sale price. This is worsening the supply shortage

Sure, they are three problems, each capable of preventing my scenario from becoming a reality, not to mention the fact that with supply so short too many buyers may not be able to find a home suitable for them. The truth is no one can say with any certainty what is going to happen next. Time will tell.