The Nationwide have released their monthly report on house prices and yet again they have gone up by 1.2% month on month and 8.6% year on year.

To many homeowners (either in or on the brink of negative equity) in Britain this news will be welcomed and seen as proof that house prices are on their way back up after the downward trend of 2008, which now seems like a lifetime ago for those who decided to sell their property to rent.

The end of the recession (Cough!) and the news that prices have gone up continuously over a prolonged period of time would make you think that the banks must be falling over each other for their share of the mortgage market and competion is hotting up on mortgage products.

But they are not.

The average house price is now £163,481 so lets pretend I am a university graduate, twenty something years of age who has just walked into a good job and I am of course a first time buyer.

So what sort the sort of mortgage products are out there for me to get started on the housing ladder and would any of these products suit my situation? after all my earnings are over the average wage.

There are a few (many less than 2007) products to choose from so these are some rough averages for the types of product out there.

Firstly a two year fixed rate of 3.69% with a 70% LTV sounds OK until you realise that your looking at a deposit of £49,044.

If I have just left university I am going to probably be in quite a bit of debt so unless I have rich parents who have managed to remain out of debt during the years of free credit then I am stuffed with that product.

Then there is a 3 year tracker at 2.99%, LTV of 75% leaving a deposit of £40,870 and interest only monthly repayments of £305 interest only, which seems like splitting hairs on the deposit and I am not even touching the sides of repaying my mortgage yet still paying over 300 quid a month.

There is of course the risk that my property will depreciate in value and I am left in negative equity.

All of a sudden renting seems like a much more attractive prospect.

There is an 85% LTV product, which would require a much smaller deposit of £24,522 but the monthly interest only repayments would be £602. Call me old fashioned but why would I take out a loan I could not repay in full? It's like renting off the bank.

This just goes to show that the banks are far from optimistic about the true state of the economy and British housing market.

Why else are they not jumping in so as to increase their share?

With the treasury teetering on the edge of bankruptcy there is only one route and that is the front door of the IMF who will almost certainly throw up interest rates and the banks will be very aware of this so the illusion of a recovering housing market with such low sales volumes must be seen for what it is.

A con.

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