Nationwide statistics show house prices steadily rising

Despite worries of a slowdown in the economy, the latest figures suggest that the UK housing market remains strong.

The Nationwide Building Society’s latest house figures reveal an increase of 1.1 per cent between June and July 2001.

Over the 12 months to the end of July, prices rose by 10.9 per cent, increasing the average cost of a house to £89,962.

Although July's increase was down on June's rise of 1.9 per cent, Nationwide said: "House prices are rising at an unsustainable rate and the market must slow at some stage, although there are no visible signs of this happening yet.

"If homebuyers remain confident about the housing market and their ability to finance their mortgages, an upward revision to our forecast will become almost certain."

Alex Bannister, Nationwide's group economist, says although there had been a "modest slowdown" in the pace of growth during July, prices are still rising significantly faster than a year ago.

With interest rates low, mortgages are affordable, and demand for homes are, as a result, high.

Mr Bannister added that Nationwide is still predicting a weakening in consumer confidence, leading to lower house price inflation later in the year, though at present there is "no discernible dampening effect" on the market.

Nationwide predicts that, during 2001, around 1.4 million homes will change hands. This figure is similar to last year's, but "well down" on the level reached during the 1980s boom - when around 2 million houses were sold in a year. (AMcE)

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