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Thursday, 7 March, 2002, 07:17 GMT
House prices shoot upwards
Looking in an estate agent's window
Property prices are shooting up
House prices in Britain were more than a sixth higher on average in February than a year earlier, a survey has revealed.

The Halifax, now part of HBOS banking group, said that the 16.9% price rise was the strongest annual rate in 12 years.

Between January and February the rise was 1.5% on average, Halifax said, boosted by the continuing strength in consumer confidence and a supply shortage.

The average house price is now 101,980, the Halifax said, having jumped 8% in the past four months.

The surge will put added pressure on the Bank of England as it tries to work out what to do with UK interest rates.

The Bank is later on Thursday, when it announces its latest interest rate decision, tipped to keep rates at 4% for the fourth month in a row.

A decade of gains

A housing market survey last week by the Nationwide building society said prices rose 1.6% between January and February, and 14% over 12 months.

And Thursday's survey follows a separate Halifax survey revealing that the average price of a house in the UK has risen 75% in the past 10 years.

However, the survey revealed a marked north-south divide.

Some areas of south east England saw property prices rise more than 200% in the 1990s, the Halifax bank said.

In some parts of Scotland, however, house prices actually fell.

'Bouncing back'

Halifax's head of group economics, Gary Styles, said the widely-anticipated slowdown in the housing market had failed to materialise.

"Although this largely reflects a bounce back in consumer confidence from the lows of the September terrorist attacks, supply shortages in the market are also contributing to higher house prices," he said.

But he pointed out that the background against which UK consumers were borrowing was one of a weak US and world economy.

"We continue to expect slowing UK economic growth and rising unemployment will result in an easing in house price inflation over the course of 2002," he said.

See also:

28 Feb 02 | Business
House prices keep on rising
26 Feb 02 | Business
House price divide widens
19 Feb 02 | Business
House prices rise sharply
06 Sep 01 | Business
Do you live in a property hotspot?
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