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.

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).

Nationwide have issued their figures on UK house prices for August, and it contains yet more positive news.

The average house price was 1.6% higher in August than it was in July. This the 4th consecutive monthly increase in UK house prices.

Growth on the less volatile and reputedly more accurate tri-monthly measure accelerated from a growth of 2.7% in the three months ending June, to 3.3% in the three months ending August. And annually the rate of decline has slowed from 6.2% to 2.7%.

Martin Gahbauer, Nationwide's chief economist has put the upward pressure down to the low interest rates, but as I have already commented on Write About Property, I am taking that with a pinch of salt, because, lest we not forget Nationwide has every reason to create positive sentiment on the housing market.

I'll tell you what I told them:

"The reality is that transaction levels are still sucky, no one with a hefty deposit can get an affordable mortgage, and that is out of the people who have sufficient job security to even want a mortgage in the current climate. The only prop underneath prices is the fact that supply is low and this has meant that buyers have temporarily lost the buyers-market power they had in 2008, if that changes prices will fall again."

So there you have it. The advice you can take from that is: get in quick and sell in a sellers' market, before too many people catch on.

This article that I have just read in The Times is about the best example I've seen so far to show the topsy-turvy world of the current UK housing market.

The article is on how now is the time to sell your house because you stand a good chance of getting a good price, because low-stock levels mean little competition from other sellers. But it is also noted in the article that if supply increases massively it will likely drive prices down yet again.

So if everyone follows the advice of those in the article, then everyone will be knackered for getting a good price. The irony could be that, by printing this article The Times have given the game away.

We have been warning on this blog for many months now, that a rapid increase in supply would be detrimental to the future of UK house prices, and how the currently positive news threatened to make that a reality. However, it does seem that there have been a few shrewd people who have timed it just right in their area and got an extremely good price for their house.

If you do decide to follow the advice of the Times interviewees and check out housing supply and get started about selling your house, Zungalow offers a fantastic property advertising package for just £29 per year. Such a low price perhaps takes the risk out of sticking your toe into the house selling water.

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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