UK House Prices up 0.6% in Oct say Land Reg, Analysts all Prepare for the Fall

So, UK house prices are still rising. Today the Land Registry, by far the most accurate index of prices in England and Wales -- if a bit behind the rest -- revealed a 0.6% increase in house prices on the month in October.

Meanwhile sales volumes are still falling, with 52,608 sales per month recorded between May and August this year, compared to 56,107 per month in the same period last year.

One must wonder how long the lack of supply causing disproportionate rises in some areas, will distort the picture of the UK housing market, which is clearly still in a lot of trouble. How could it be anything else with UK unemployment so high, finance so tight and with so few people in a position to afford the step onto the property ladder.

Even the Royal Institute of Chartered Surveyors is asking the same question, in fact they are acknowledging that it will be hard pressed to survive the continued negative pressures into next year.

"House prices are set to rise further in the coming months supported by an ongoing shortage of property listings relative to demand.

"That said, renewed challenges are set to face the market in 2010 particularly in some regions where unemployment will remain elevated. In particular, the ending of the extended zero band on stamp duty in the new-year could have a disproportional impact on those markets outside London and the south east."

Savills also forecast that prices will fall again next year, before returning to growth in 2011. In the last housing crash house prices fell for nearly three years, and then didn't rise for a further 3. There is nothing as yet to suggest this one will be any different. The current price rises have stopped the correction and are only going to drag it out further.

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