The latest reports on the London housing market are of massively increasing demand fuelled by bonus fever. Not by people spending their bonuses, but of people buying houses in advance of the bonuses they will receive.

The Times ran an article on Monday past on how Prime London properties (£1m plus) in "bankers enclaves" are selling for prices in excess of prices seen at the peak of the boom in 2007, as banker's enter sealed bidding wars with each other and wealthy foreigners for the best properties. The reports are coming from Knight Frank, the global estate agency with a vested interest in London's prime market.

Have we learnt nothing? If we have seen the last of price drops in the UK it is only just and by extreme luck, because houses are still grossly overvalued according to impartial analysis, and still mostly unaffordable to the largest demand base of first time buyers. But we are all quick to jump and shout about how brilliant it is that these houses are selling for £5m+.

There is very little to justify these houses to hold such a value, having been worth less than a million only a few years ago. Their price is being determined by the wealth of London bankers rather than the value of the property and such cycles are only ever going to lead us into more crashes.

The bank's quick return to such huge bonuses has sparked anger in the press and the government. There is even talk of a windfall tax on the big banks.

Something like a windfall tax is the only way to stop the banks from giving out such huge payments, because the banks have to be competitive about what they pay the best investors, or face losing them.

The government stopped RBS from giving bonuses last year, and they lost staff. Trouble is they started offering multi-million Pound payments to lure the best bankers to come and work for them instead. If a windfall tax is levied on all banks then it would even the playing field and stop bonuses equally across all banks.

However, the financial services sector accounts for about 15% of UK GDP, and the government will not want to damage it too much either. We will find out in the pre-budget speech, due in the next few weeks.

I just wish that something could be done to regulate house prices at the same time. But should the prices of lavish properties in such areas really be regulated? How do you regulate a sought after property? If multiple wealthy buyers want the same property it is always going to mean a bidding war. We can't ask the seller to toss a coin. No, it does look like regulating the banking industry is where my anger will have to be channelled after all.

Across the rest of the market, demand is currently increasing. Today the British bankers Association revealed another rise in mortgage lending in September. Again it was massively higher than September last year, but lower than the peak in 2007. None the less, people are getting good prices for their homes at the moment. If you want to sell your house you can do so with Zungalow for just £29 per year.

Assetz have done it again. In the company blog they have said that unemployment won't affect house prices.

The government has admitted that private sector unemployment is not going to be as bad as first thought, so "private sector unemployment is not going to affect house prices," they assert in a post on the company blog.

They then go on to explain how the result of the election will decide how many people are left unemployed by government spending cuts, possible putting the total jobless number up to 3.75million.

They don't believe it will be this high, because they say the government will choose other methods of cutting spending, anybody fancy the end of Quangos for example ? Assetz asks.

But even if the government does cut a million jobs, this still won't affect house prices, because private sector recruitment will increase to balance the effect, and also because it won't outweigh the positive effects of significant lack of supply.

Yes, the massive supply shortages are propping up prices, but surely they cannot expect that to keep prices rising forever. What everyone who wants a housing market recovery wants is a massive increase in demand, and in transactions.

For that to happen we need supply to increase so there is a home suitable and affordable for everyone. At any rate if prices keep increasing, and if there is a big increase in demand, more people will be selling their house and this will tip the supply balance. You just cannot have a positive housing market based on what can only be considered a negative keeping price growth positive.

Of course, the biggest negative is the constricted mortgage market, until that changes it is only likely to be weak supply that is capable of pushing prices up.

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 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 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.

The Halifax released the figures from its house price index in September and said that house prices had risen 1.7% on the month leaving them7.4% lower than this time last year. The news came just a few days after Nationwide released their September figures of a 0.9% rise on the month, and the average house price now back to what it was last September. The Land Registry however, recently revealed their figures for August, in which they said house prices had fallen 0.1% on the month, but that the rate of annual decline had slowed.

The Land Registry index only covers England and Wales, but as its prices come from completed sales, whereas the Nationwide and Halifax are based on mortgage approvals, the Land Registry is agreed to be the most accurate.

However, because the Land Registry is behind the other indices, analysts (which means just about the whole country) are wondering whether the Land Registry's drop in prices was just a blip against the run of rises; 5 consecutive months according to Nationwide, and 3 consecutive according to Halifax.

I was quoted in an article yesterday on Write About Property, i gave the following advice to potential sellers:

"Prices have fallen drastically on UK property there is no question about that. Nor is there any question about the fact that it will likely be 2-5 years before houses regain the value they held in the beginning of 2007.

"However, all houses have fallen in value, so you will save on your next home what you lost on the sale of your old one. But now, if you sell your house to first time buyers, you can take solace in the fact that, yes, you lost money but you did so voluntarily to help a first time buyer get onto the property ladder."

Nationwide issued its house price index for September yesterday. It showed that house prices rose on average 0.9% between August and September. The tri-monthly measure, which is less volatile and widely regarded as the more accurate short term indicator rose from a growth of 3.3% in the 3 months ending August, to a growth of 3.8% in the 3 months ending September.

This is the fifth monthly rise recorded by the Nationwide, and the lender now has the average UK house price at the same as it was in September last year -- before the catastrophic collapse of Lehman Brothers.

None the less, this still does not signal the end of the crisis, because -- as even Nationwide acknowledge -- transactions are still far too low to support such growth, leaving it based solely on the drastic shortage of housing supply.

Martin Gahbauer, Nationwide's chief economist said:

"The further increase in house prices is very much consistent with improvements in a broad range of economic and financial indicators over the last few months, all of which suggest that the most intense phase of the recession and financial crisis has probably passed. However, given that the housing market still faces considerable headwinds in the form of high unemployment, restrictive credit conditions and an impending withdrawal of the stamp duty holiday, it would be surprising to see house prices continuing to increase at the very strong rate seen in recent months."

But as we continue to say, house prices make no difference to people who want to sell their house, because you will save what you lose on the house you buy, which will also have lost value. Sell your house 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.

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.