BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific
BBCi NEWS   SPORT   WEATHER   WORLD SERVICE   A-Z INDEX     

BBC News World Edition
    You are in: Business  
News Front Page
Africa
Americas
Asia-Pacific
Europe
Middle East
South Asia
UK
Business
E-Commerce
Economy
Market Data
Entertainment
Science/Nature
Technology
Health
-------------
Talking Point
-------------
Country Profiles
In Depth
-------------
Programmes
-------------
BBC Sport
BBC Weather
SERVICES
-------------
EDITIONS
 Thursday, 2 January, 2003, 08:56 GMT
House prices 'unlikely to crash'
The UK's house prices rose by 25% in 2002 and are set for further rises this year, according to the Nationwide building society.

Nationwide, which produces one of the country's leading house price indices, said the average house price rose by 1.7% in December to 117,206.

The company is now expecting a 10% jump in overall house prices in 2003, but warned that some areas, particularly London, would see falls.

"Certain hotspots may see things cool down considerably," said Nationwide's chief economist, Alex Bannister.

Slowing boom

The building society's survey suggested average house prices grew by 23,662 or 65 per day in 2002, during a boom year for the housing market.

(A crash) is possible but pretty unlikely

Alex Bannister, Nationwide

However, growth rates showed some signs of slowing. December's 1.7% rise came on the back of a 2% increase in November.

And in the three months to December, prices grew by 6.7% on the previous quarter, down from growth of 7% and 7.5% in the two previous three month periods.

Various surveys have predicted that prices will continue to weaken in 2003, with a survey of experts predicting last month that increases would slow to between 5% and 10%.

More confidence ahead?

The Nationwide is more confident, suggesting that some areas would continue to see growth as high as 15%.

A regional growth pattern has developed since 1997, with prices originally rising fastest in the South East before the hotspots move

Nationwide

The building society also contradicted suggestions that a housing market would crash like in did in the early 1990s.

"(A crash) is possible but pretty unlikely," said Mr Bannister.

"We have pretty good economic conditions, we have low interest rates and there is no reason why we should see anything like a repeat of the early 1990s."

Yorkshire strength

Regional house prices will vary considerably, however, with Nationwide predicting a sharp reversal of the leaps seen previously in London and the south east.

Its figures suggest London is now showing weaker growth than all but two other regions, Scotland and Northern Ireland, as job cuts in the financial world hit house prices at the higher end of the market.

London house prices grew 21% in 2002, compared with 35% growth in Yorkshire and Humberside and 16% in Scotland and Ireland.

"A regional growth pattern has developed since 1997, with prices originally rising fastest in the South East before the hotspots move to regions such as the Midlands and East Anglia and finally on to Wales and the North," said Nationwide.


News

Analysis

Tools

FORUM

TALKING POINT
See also:

31 Dec 02 | Business
27 Dec 02 | Business
19 Dec 02 | Business
16 Dec 02 | Business
20 Nov 02 | Business
20 Nov 02 | Business
11 Dec 02 | Business
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories

© BBC ^^ Back to top

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East |
South Asia | UK | Business | Entertainment | Science/Nature |
Technology | Health | Talking Point | Country Profiles | In Depth |
Programmes