The Nationwide has reported that house prices rose 1.6% in August compared to July, providing more evidence that the worst of the economic crisis is behind us.

While houce prices are still lower than this time last year, the annual rate of decline dropped sharply on July's level of 6.2% to just 2.7% in August.

While the Nationwide's claim that the low UK base rate is the underlying factor in these rises, there are still plenty of negative news reports relating to the availability of mortgages, especially to the first time buyer. However, rising prices do not necessarily indicate rising sales.

The Nationwide's chief economist Martin Gahbauer explained: "The fall in debt serving costs has meant that fewer homeowners are under immediate financial pressure to sell than might have been expected in a recessionary economic background with rising unemployment."

So while the eased debt burden on existing homeowners is supporting price rises, the lack of mortgage products to new home buyers suggests that there is some way to go before demand is also a major factor.