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Friday, 13 December, 2002, 10:48 GMT
House prices slowing down
For Sale signs
Are the boom times over?
Bradford & Bingley has warned that house prices are set to grow at a "significantly lower rate" next year.

There has been a degree of irrational exuberance and the rate of growth needs to slow

Christopher Rodrigues, Bradford & Bingley chief executive
The bank said there was evidence that property prices were dropping in some parts of London, and were slowing down in the south east of England.

It said it expected price rises to cool from their present level of about 30% to "low single-digits" in 2003.

The forecast backs the findings of recent surveys which have suggested that the growth in UK house prices is finally starting to ease.

The latest Halifax survey, released last week, found that house prices grew by 1.4% in November, down from October's figure of 4.7%.

Looking for value

Bradford & Bingley chief executive Christopher Rodrigues said he was happy to see the housing market begin to cool.

"These are good things as there has been a degree of irrational exuberance and the rate of growth needs to slow," he said.

"The customer is getting sensible and looking for value.

"Our best guess would be that house prices will grow in the low single-digits next year."

Beating targets

In a trading update Bradford & Bingley said it expected interest rates to remain low because of the sluggish state of the UK economy.

"This should underpin the housing and mortgage markets into 2003 and lead to continuing low arrears on mortgage books."

The bank added that it was "comfortable" that it would beat analysts' forecasts of a profit of 265m ($421m) in the current financial year.


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