Time to buy index for june 2008

May index here

This month index

In June the index stands at 496 unadjusted(U) and 694 adjusted(A)

This gives a guide that house prices are around 49% over valued and that market sentiment pushes that to 69% over valued. DO NOT BUY

That is not to say that house prices will fall by either, but it gives an idea of the direction.

House prices have fallen this month which would have improved the index if it was not for the fact that mortgage rates were raised since last month.

It is pretty clear that house prices are not 69% over valued, however they may as well be as nobody in their right mind is currently buying.

PREDICTION

House prices to drop another 20% with the Halifax index bottoming at £140,000 in Q4 2009.

In my opinion mortgage lending has pretty much returned to normal even though lenders are still lending above average multipliers and mortgage rates have again returned to a longer term normal level. This has meant that buy to let as one of the key drivers of house prices is not makes economic sense at current rates.