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.

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House prices rose for the third consecutive month in June according to the Nationwide house price index. Also, the tri-monthly measure, widely regarded as the less-volatile and therefore more accurate, has now turned positive; with the average house price 0.9% higher in the three months ending June than the three months previous.

However, it is common knowledge that the current positive data is occurring because of supply shortages, and not because of increased transactions that you would expect if the market had bottomed. Even Nationwide admitted in their report that the current level of transactions, at 55% below the long-term average should be overseeing price falls, not rises.

This has analysts worried that prices will fall again in the near future if supply increases, which it may well do on the back of such continued positive data.

None the less, in our opinion sellers, especially those selling so that their family can move into much-needed larger house, must be selfish and think about themselves not the housing market.

If supply does increase now, then yes prices will fall again and possibly quite drastically. But for those who are planning to move in the near future now is the time to sell your house; sell-up now and get a better price than you will a few months down the line.

As we said in our last post, if you don't want to sell your house now because of the price falls, just remember that bigger houses are falling in value faster, so selling to trade up now is not as bad an idea as you may think.

Also the type of massive supply increases that analysts are worried about, will come only if the masses of investors and forced landlords see now as the time to sell. So, regular people selling their house to move, may not put downward pressure on prices. So you get the best price for your home, and then rub your hands and smile when the investors do let go and prices fall again.