The fall in house prices continues, despite the odd statistical anomaly.

Mortgage approvals have fallen to the lowest level on record. This is due to the credit crisis which has led to a drying up of mortgage funds. Many would be homeowners are simply unable to get a sufficiently large mortgage.

There are also signs of problems in the buy to let sector. With an increase in the number of landlords in arreas. Given the increased importance of the buy to let sector for the housing market, there are concerns that this could stimulate further house price falls.

Due to falling prices, the number of housing starts has declined as the UK construction industry suffers from the downturn.

Despite falling house prices, inflationary pressures are increasing as oil prices increase the cost of living.

The only good news is that

• Interest rates may be able to fall in the coming months as the economy slows down and inflationary pressures subside.
• If credit conditions improved, there are many who would like to buy