August house price index

August once again shows an increase in the average house price in the UK. A 1.6% increase making the new average house price £160,224.

The price of a typical house rose for the fourth consecutive month in August, increasing by 1.6% on a seasonally adjusted basis. The 3 month on 3 month rate of change - generally a smoother indicator of the near term trend - rose from 2.7% in July to 3.3% in August, the highest level since February 2007. At £160,224, the average price of a typical UK property is still slightly lower than 12 months ago. However, if house prices continue to increase month on month we will soon reach a point where the annual house price has increased and this will hereby mark a huge improvement in the sector.

Economic Outlook Brightens

According to the CBI the UK economy is expected to emerge from recession through modest growth in the third and fourth quarters of this year.

Both globally and in the UK production is starting to increase. However, the pace of recovery in 2010 is expected to be slow. "The outlook is improving as the UK draws strength from quantitative easing, a weak pound and a recovering global economy. Although growth this quarter should mark the end of the recession, conditions in the UK will remain tough for some time yet, and it is difficult to see where demand growth will come from." [Richard Lambert, CBI Director]

Quatative easing - was the governments approach to improving lending to businesses and the mortgage market. This is effectively printing money, they payback of which will be either public sector cuts or tax increases hence this is why the political parties are now talking around these factors in there press conferences.