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.