In August the index stands at 286 unadjusted(U) and 356 adjusted(A)
This gives a guide that house prices are around 28% over valued and that market sentiment pushes that to 35% 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 and mortgage rates have fallen this month which has reduced the index this month. The biggest contributor to the index fall this month was the falls in fixed rate deals for buy to let mortgages.
The unadjusted index is now down from it's peak of 645 in July 2007
The adjusted index has also dropped last month as swap rates are now seen as falling further. This currently suggests that mortgage rates will be lower in the future.
House prices to continue falling 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 still does not makes economic sense at current rates.
A vague explanation here