According to the Nationwide Housing Index house prices in the UK have risen for the fifth consecutive month, giving homeowners hope that the worst of the housing crash is over. In September house prices rose by 0.9% bringing house prices to the same level as September 2008. The average house price in the UK now stands at around £162k, which is approximately £2k more than in August.

The big question on everybody’s mind is whether these are just green shots or whether house prices are starting to rebound northward. Nationwide reports mixed signals indicating that, although we can see improvements in a range of economic indicators, high unemployment, restrictive credit and the withdrawal of the stamp duty holiday, threaten further increases. In addition, the number of houses being sold is still relatively low at 4% on an annualised basis. This is still below levels of turnover pre-downturn.

On the other hand, the report indicates that rental income is still relatively subdued, which can be attributed to a decline in the number of ‘accidental’ landlords. This suggests that more homeowners are putting their properties on the market. The additional supply as a result of this, may further restrict prices from increasing in the short term.

Despite the positive house price increase, Fitch, the ratings agency, suggested that house prices have a further 17% to fall. It certainly remains to be seen how the next couple of months will unfold in the housing market.