House prices continue steady rise

No sign of a price crash yet

UK house prices rose by 1.2% during November, according to the latest survey by the Nationwide.

The increase means the average UK house price has now risen to £133,388.

November's rise was down from October's 2% increase in prices, and Nationwide said annual price inflation had fallen to 15.2% from 16.1%.

But the society said housing market conditions remained strong, with mortgage rates still relatively low and employment high.

It also said a number of one-off factors were supporting the market, including renewed confidence following the war in Iraq and worries that stamp duty will be increased in the next Budget.

Onwards and upwards

Despite worries that house prices could be heading for a crash, the market has continued to drive ahead.

Recent price surveys have shown values still rising, although the rate of increase has been slowing.

And on Thursday, the British Bankers' Association said net mortgage lending from the UK's nine major banks rose by a record £5.9bn in October.

Earlier this month, the Bank of England raised interest rates by a quarter point to 3.75%, partly because it thought the housing market was in danger of overheating.

Widespread strength

The Nationwide said house prices in northern regions - which this year have seen the fastest rises - had not slowed as much as it thought they would.

Also, property prices in London and the south east of England were showing signs of picking up again.

The building society stuck by its estimate of a 15% rise in house prices for this year, but said it expected a smaller rise in 2004.

"The housing market looks set to finish 2003 on a strong note and carry over much of the momentum into the early part of next year," said Nationwide economist Alex Bannister.

"We expect prices to rise by 9% in 2004."