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No slowdown in house prices, says Nationwide

There is no evidence of the housing market slowing down, with the average property price showing an annual rise of 22.2 per cent to £112,919 last month from £92,432 in September 2001, according to the latest research by Nationwide Building Society.

Its analysis of the UK housing market for September shows that the average price was up by 2.1 per cent from £110,890 in August.

Nationwide says with the bank base rate set to remain at 4 per cent for the rest of the year and employment growth still strong, it is revising its forecast for house price growth over the year up to 23 per cent from the 18 per cent prediction it made in June.

If this level of inflation is realised, the average house price in December will be £115,059 compared with £93,544 in December last year.

Looking at quarterly chan-ges in the housing market, Nationwide finds that the average price over the past quarter from July to September was £110,830 compared with £103,501 in the second quarter of the year and up from £91,049 in the third quarter of last year.

This represents a quarterly change of 7 per cent and an annual change of 18.1 per cent.

Group economist (finance and planning) Alex Bannister says: “Real take-home pay growth has slipped recently and this will combine with worsening affordability to dampen conditions. However, the market has plenty of mom-entum, driven in part by homebuyers extending their mortgage in response to the low interest rate environment.

“Most borrowers are not overstretching themselves and we call on lenders to maintain a prudent approach to their lending policy.”

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