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New millennium sees house prices double

The average house price has more than doubled since the start of this millennium, according to the Nationwide&#39s monthly house price index.

The society says prices rose by 0.9 per cent in June, meaning the average house is now valued at £151,524.

Chief economist Alex Bannister says the pace of house price growth has evened out across the country compared with recent quarters and the improved jobs market has caused price growth to pick up in London and the Home Counties.

In Scotland, the annual 24 per cent increase has taken the price of the average house above £100,000 for the first time.

Prices in Northern Ireland also breached the £100,000 mark following a 14 per cent increase for the year.

Bannister says despite downward pressure on rental yields in all areas, he expects many buy-to-let investors to remain in the market for the long term.

He adds that comments made by Bank of England governor Mervyn King are likely to have led to a downgrading of expectations on prices.

Bannister says: “While we would concur with the majority of the governor&#39s comments, we believe that the most likely conclusion to the current housing market cycle is a long, drawn out period of slower house inflation and low housing market activity as opposed to a slump in prices.”

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