Following the period October 2006 to July 2007 that showed annual increases of 10% to 12%, a significant decline set in as interest rates and other pressures on credit started to bite. The year on year changes from March 2008 onwards have all been negative reaching a low of -17.5% in February. Since then there has been improvements in each month with prices now some 10% above the level of 12 months ago.

For the twelve months through to the start of 2009 the housing market was under continuous pressure with prices falling. With lenders lacking sufficient funds and with the tightening of borrowing rates, demand lessened with a consequent effect on prices moving down to a level in February 2009 that was exactly where it was in August 2004. As funds have become more available steady upward movements have since been seen.

Changes over the previous month inevitably lie within a narrow band. With the index having declined in the way it has, the monthly changes are more frequently negative. Throughout almost the whole of the fifteen months to February 2009 the index was lower than the month before. March saw a departure from this pattern after which all but one of the monthly changes have remained positive.

Under normal circumstances, the number of loans approved for house purchase, when not seasonally adjusted, falls steeply in December and January when there is littel activity in the housing market. The severe credit situation over the last 18 months has been well documented but the pattern remained broadly similar although at a lower level. The first sign of improved lending appeared in February 2009 after which an average of 50,000 per month was the norm but with the usual Dec/Jan dip. March and April 2010 seem to be back at the previous average.

Since 2008, the sub-prime and the Northern Rock issues gave rise to startling percentage decreases with those granted in June, July and August 2009 being 75% lower than a year earlier. Inevitably, once the credit situation improved, year on year increases became the norm for a period of 12 months but with the trend changing significantly since November.