House price boom surges on

Most market watchers are predicting lower growth next year

UK home owners are set to get another fillip this week, with two closely watched surveys expected to report rising house price inflation.

The August figures from Nationwide building society and Halifax bank will be another blow to those waiting to get on to the housing ladder for whom prices might seem more out of reach than ever.

But for those who have recently bought, it will provide some reassurance that the housing market is not about to turn down.

Newspapers on Sunday reported that Nationwide would say property values were now increasing by 10-11% a year while Halifax was raising its estimate for annual house price inflation to 9%.

Previously, both companies had predicted house price rises for this year of about 7%.

More modest

Despite the good news for home owners, analysts said Nationwide was likely to repeat its earlier warning about the "unsustainability" of current house price rises.

Most market surveys are predicting more modest property price rises for 2002 - commonly in the range 3-5%.

Analysts say there is still a shortage of housing, particularly in south-east England, which is driving the market.

But a brake might be put on housing market inflation by factors such as economic slowdown - leading to higher unemployment - and rising interest rates.

Nationwide is due to publish its report on Tuesday while the Halifax survey comes out the following day.