Over the past few months there have been increases in property prices in the UK, and house price indexes have shown that property prices are now at the sort of level that they were at around twelve months ago, although they are still falling short of the levels they reached at the peak of the property market in the latter part of 2007.

Whilst some industry groups have said that property prices will continue increasing there are others that have said that there is no way that property prices will return to the levels that they were at before the bubble burst.

Over the past few months the property market has been given a helping hand by high demand and low supply, and according to reports in some areas properties are being sold through sealed bids within days of hitting the market as a result of supply being so low compared to demand.

However, despite this encouraging situation many experts are certain that the property market will not return to its boom days, and some groups expect house prices to continue falling next year.

One of the things that could affect the current situation is that an increasing number of homeowners may put their homes up for sale given the success of others, and this will increase supply.

One official said: “A lot of the improvement has been driven by supply being very tight, but there is evidence that people are beginning to react to the improvement in market conditions and are more inclined to have a go at selling their property.”

However, an economist from Global Insight said: “Despite further likely gains in the very near term, we suspect that house prices will be prone to significant relapses and will probably be no more than flat overall between now and the end of 2010. Much will clearly depend on whether the economy can sustain a probable return to growth in the third quarter, how much further unemployment rises, how quickly and to what extent credit conditions ease, and how many properties come on to the market over the coming months.”

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