Property website Rightmove said that property prices surged 0.6 per cent in the current month, but the online estate firm cautioned against lenders' hesitation to extend loans and poor stocks in the market.

In its monthly housing survey, Rightmove established that overall value of property across many parts of UK declined, but property prices in September improved a bit in England and Wales.

Rising property prices in East Anglia, London and the South-East of England offset the impact of decline in real estate rates in the entire nation. North England reported significant decline in property prices due to low demand under the impact of global slowdown.

Miles Shipside, Commercial Director of Rightmove, said: "The recession appears to have hit prices harder in the north, and this is compounded by lenders' more conservative attitude to risk. Lenders quite naturally prefer to lend to lower risk borrowers in better locations, with better job security, larger deposits and more resilient property values."

The Ernst & Young Item Club too indicated house prices reversal in the first half of next year, with low hopes for the property market to return to its 2007 level in next five years.