House prices in England and Wales have risen for the fifth month in a row according to data released by the Land Registry. It would appear that the average property in the UK increased in value by 0.6% during October with the average UK property now back to levels seen last November. If we look back, October and November were the most difficult months for the UK financial system, UK property market and the UK economy. So where does this leave the UK property market?

The year-on-year reduction in UK property prices is now down to 3.4% from 5.4% in September and would appear to reflect underlying demand for property in the UK. However, the number of properties changing hands has fluctuated over the last few months and indeed over the last couple of months it has been in decline. Whether this reflects the ongoing opinion that UK property prices are being squeezed higher because of a lack of quality property, leading to people bidding higher than they would normally bid for a property is debatable but at some point this will level out.

The signals from the UK property market appear on the whole to be very positive but the signals from the UK mortgage market appear to indicate a lack of liquidity - something which is confusing analysts and potential property buyers.

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