[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Thursday, 30 November 2006, 08:29 GMT
House price growth gathers pace
House price graph
House price growth accelerated in November, rising 1.4% for the month, the Nationwide building society says.

The annual rate of house price growth rose to 9.6% from 8% in October, its highest level since February 2005, the Nationwide said.

The average UK house is now worth 172,185, and is rising in value at the equivalent of 41 a day.

Nationwide said the supply of homes for sale was at a two-year low and that the market was "fairly firm".

Rate rises
Current housing market indicators are firm and do nothing to dent the prospect of further rises in house prices in the very short term
Fionnuala Earley, Nationwide

Continuing growth in UK house prices may come as a surprise to some, as it follows two hikes in interest rates.

Since August, UK interest rates have risen from 4.5% to 5% in a bid to quell inflation.

Nationwide noted a decline in buyer enquiries in September - following the first of the two rate hikes - but said this had proved "short-lived".

"Looking forward, current housing market indicators are firm and do nothing to dent the prospect of further rises in house prices in the very short term," Fionnuala Earley, Nationwide group economist said.

However, the Nationwide did strike a note of caution, looking ahead to 2007 and beyond.

"Affordability must eventually bite, which limits the prospects for rapid nominal house price gains to continue far into the future."

"However, the likelihood and size of any fall will depend on how overvalued the market already is," Ms Earley said.

The Nationwide added it had estimated in June that there was a "modest level" of overvaluation.

Earlier this month, David Miles, chief UK economist at Morgan Stanley, suggested that substantial house price falls were likely over the next few years.


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



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific