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I saw this recently in a Moneyweek article…

“It seems the worst is behind us,” says Nicholas Leeming of Propertyfinder.com. “Confidence in the housing market is at its highest since the credit crunch began.”

Also I see that new mortgage approvals are up and that Nationwide and Halifax are saying that house prices are not just flat, but rising.

So am I right to be thinking that now is the best time to be buying into property?Everyone I’ve spoken to over the past few days has agreed with me that now could be a great time to get into property again.

However, Moneyweek have 5 reasons why this might not be the case:

Banks are terrified of lending. Home loan conditions are still very tight – two-thirds of all current mortgage offers require a 25% deposit. And they aren’t showing any sign of easing up. Gross mortgage lending was down 52% year-on-year in April, while net lending reached its lowest for eight years, says the British Bankers’ Association.

Mortgage approvals are still 22% down on April 2008 and 60% belowtheir ‘pre-correction’ levels. That’s a long way off the 80,000 level that has historically been consistent with stable house prices, let alone values rising again. The rising cost of borrowing will EXTINGUISH any signs of recovery.If you’re taking solace in low interest rates, you better think again. Homebuyers are about to face their first mortgage rate rise this year. Nationwide has upped the cost of its fixed-rate deals by up to 0.86%, and state-owned Northern Rock has raised its five-year fixed rates by 0.2%.

Ray Boulger at mortgage broker John Charcol says most, and possibly all, of the part-nationalised Lloyds Banking Group – which includes Halifax, Bank of Scotland, Lloyds TSB and Cheltenham & Gloucester – will increase their fixed rates, “in some cases by quite large amounts”.

“Any material rise in government funding costs will have a knock-on effect on secured borrowing, putting significant pressure on households,” says RBC Capital Markets’ John Wraith. “This could have a serious impact on any UK economic recovery.”

UK property is still MASSIVELY unaffordable. Do you really think that house prices have dropped to a reasonable and fair level? From 1983 to 2001, the ratio of mortgage advances to earnings remained within a range of two to2.5times. By 2007, it had risen to above four times. Although affordability has improved a bit in the last year, it remains stretched.

According to John Bell of Shore Capital: “If real [inflation adjusted] wages fall, affordability may not be restored for thebest part of a decade.”And real incomes are falling. UK average weekly earnings fell 3% year-on-year in March. During past downturns in Britain, Japan and the Nordic countries gains made during the bubble periods were entirely lost in real terms.

If history repeats itself, Bell predicts “house prices could more than halve from here”. UK’s own ‘sub prime’ crisis is about to explode.Almost a third of British non-conforming mortgages – where borrowers with weak credit scores were given loans on the back of minimal, or no, documentation – taken out in 2005 are now 90 or more days behind on their payments.

These are our ‘sub prime’ mortgages. According to David Watts at CreditSights these are “alarming numbers, uglier than expected”. It could all add up to another surge in repossessions, and more houses hitting the market when it’s least able to absorb them. But even the four factors above don’t take into account the housing market’s long-term enemy…

10% unemployment will make risinghouse prices avirtual impossibility

“Unemployment is predicted to soar from its current 7% to over 10%”, says George Hay on Breakingviews.

That’s perhaps the worst news of all for property prices.

When dole queues lengthen, home values fall.

Fewer people in work means lower disposable income available to make mortgage repayments. That both cuts the number of new buyers and increases the supply of forced sellers who can’t meet their existing home loan bills. Sadly, it also raises the level of repossessions.

According to John Philpott, Chief Economist at the Chartered Institute of Personnel and Development, UK unemployment will peak at 3.2 million inJuly 29, 2010– the end of the second financial quarter.

This is around the time we should see a bottom in house prices.

To repeat: this brief rally in house prices cannot last.

If you want to profit in the next 24 months,get out of the property market.

This article really gave me pause for thought. I’m not quite so sure that I’ll be jumping in quite as quickly as I originally thought. However I will be researching just as thoroughly and keeping the discussion going here.

I think the main worry for me would be to jump into, say, buy-to-let on quite tight margins - i.e. the rent only just covering mortgage plus costs plus contingency and then the mortgage rates going crazily against me.

Anyway, I thought you might be interested in this. More later.

With thanks to Pete from his Property Journey website, where he's sharing every success and failure on his ongoing journey from property amateur to buy-to-let entrepreneur. Follow him at http://propertyjourney.tumblr.com, Twitter: @propertyjourney and find him on Facebook"