While some reports are showing that house prices are cooling throughout the UK, the real story may be that due to house prices declining in London they are having an impact on the overall average house price. London house prices may be falling, but in areas outside of London and the North, prices are still rising. This means that house prices may be cooling, but mainly in areas that have a major impact on the overall house price index reading.

There are reports that certain areas and types of housing are in high demand. According to the Royal Institution of Chartered Surveyors (Rics), flats and houses are outweighing supply pushing up demand. Of the surveyors, 21% of them reported prices increased in March.

Simon Rubinsohn, Rics' chief economist, said, “Even more worrying are the tentative signs that price momentum could be set to pick up once again, as the supply of stock to the market continues to fall. It is significant that price expectations nationally are accelerating both at the three and twelve-month time horizons, and at the latter, they are at their highest level since the spring of last year.”

Online property listers have reported an increase in interest in the housing market from first time buyers. There are many factors in place that should bring back first time buyers to the market including low interest rates, government programmes assisting with deposits, a revision to the stamp duty, and growing confidence in the economy. However, once first time buyers return in a boost to the market one of two things will emerge. Either they will walk away due to rising house prices or the majority will buy. Which they do will have an effect on whether mortgage lending demand increases or remains low and lenders stay in a competitive mode. One will make remortgage and mortgage interest rate offers increase and the other will see them remain until a true trend change in the lending market occurs.