Finally a small bit of good new for home owners, house prices went up a little bit. According to figures released by the Department of Local Communities and Local Government (DCLG), the average price of a property rose by one percent to 217, 171 in July from June's 215, 029 average. It is welcome news for home owners after month on month losses since the beginning of the year.

The figures contradict those released by Nationwide and Halifax banks, who recorded 10.5 and 12.7% losses respectively. These figures were based on August data, whilst the DCLG statistics were based on July, so there could be more bad news to come.

Pressure on house prices continue because of weak market activity exacerbated by tight lending conditions, meaning first time buyers having to stump up bigger deposits than ever. Due to bad market conditions it is estimated that house prices will continue to fall as lending conditions tighten further.

July normally sees a rise in house prices, so slow growth or decline for July seems to suggest the market has still not recovered from 9 months of losses. There is an overall rise between June 2007 and June 2008, of 0.6% which makes the recent downturn look even more gloomy in comparison.

Economists have predicted that the Lehman Brothers bankruptcy will have consequences for house prices, as banks restrict lending. Economic analysts Global Insight and Capital Economics predicted that prices will continue to fall in bad market conditions. Banks will reduce lending volumes which will increase the cost of interbank borrowing. The recent HBOS crisis, whose shares dropped 22% in value yesterday, and are considering a merger with Lloyds TSB which is sure to make matters even worse.

Good news for Scottish home owners as prices rose 3.6% in July, compared with falls in Wales (0.8%) and Northern Ireland (10.3%). Average prices paid by first time buyers in July 2008 were 1.6% lower than last year, but prices for former owner occupiers were 0.1% higher.

The highest price growth was in the East (0.8%) followed by the North West (0.5%) and the South East (0.1%). London prices were stationary while the North East and South West were worst hit with 1% and 1.9% falls in property prices.

The housing market has been through a severe contraction after a decade of booming prices, sales are down 50% in the past year, and mortgage approvals are down by more than 70% which indicates that the sales have further to fall. Some estate agents have reported that they are selling less than a property per week.