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House prices up 1.2%, says Nationwide

House prices increased 1.2 per cent in January, the latest survey from the Nationwide reveals.

The average house price in January was £163,481, up 0.8 per cent from December’s average price of £162,103.

Year on year prices increased 8.6 per cent.

Nationwide chief economist Martin Gahbauer says: “House prices strengthened their upward momentum at the start of 2010. Unless there is a fall in property values in February, annual house price inflation is likely to move into double-digit territory next month for the first time since May 2007.

“Although there may still be some upward revisions to the initial estimates of economic growth, this won’t change the fact that the rebound in the housing market – and particularly house prices – has gone some way beyond the recovery in the overall economy.”

But Gahbauer warns that although economic activity is no longer falling, it remains a long way below the pre-recession level and is not yet growing “convincingly”.

Property consultancy Carter Jonas senior partner David Smith says: “The surprisingly strong house price growth in January is primarily due to the major imbalance between supply and demand. 

“There is considerable demand in the market but almost zero supply and this, above all, is what is driving prices up.”

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