AS THE nation attempts to pull itself further away from recession, the housing market is at last showing signs of long-term recovery.

Property prices fell away alarmingly after reaching a peak in late 2007 and the ensuing credit crunch and economic crisis has done little to help either sellers or buyers.

There is little doubt the house price boom was a bubble waiting to be burst and the market was artificially inflated by the time of the crash.

Thankfully there are now encouraging signs the market has corrected itself.

There have been 16 months of rising house prices although only half of the value lost in the preceding 16 months has been recovered. The recovery has been less pronounced here in the Midlands, with prices rising by just over five per cent, than in areas like London and the South East which have seen increases of around 20 per cent.

Many economists are predicting a flat property market for the rest of this year while others warn more price falls could be on the way.

The housing market remains important to the national economy because so many of us are home owners and, for most people, property remains their single biggest investment and asset.

The potential for mass job losses in the public sector could lead to another big increase in repossessions and this could play a part in determining the housing market’s direction.

The market will find its level – probably below its 2007 peak – but it may be some time before we are clear what that is.