Market's about-turn upsets the experts

After six months of gloom-laden economic winter the property market has performed the most unexpected volte face: prices are higher than a year ago, dramatically so in some parts of London.

Most experts said prices would end this year 10 to 15 per cent lower. Repossessions have risen but are nowhere near the level - as a proportion of the total stock of mortgages - of the early Nineties.

This is partly because banks, under massive pressure from the Government, have been more sensitive in how they handle customers in arrears.

Lower mortgage bills have also allowed some unemployed home-owners to "ride out" the storm.

The chronic lack of stock has also been a huge factor in raising prices, particularly in London where cash-rich, often foreign, buyers are lining up with their wads but cannot find anywhere to invest it. Property now seems a good bet in a world where stock markets are volatile.