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Slowdown set to follow a record property year

After a record year in 2001 for growth in house prices with the highest increases since 1988, Nationwide is predicting a slowdown in activity and growth in 2002.

The analysis of the housing market reveals the average house increased in value by 13.8 per cent over the year to £93,544 from £82,544 in 2000 and growth was national, not just in the South-east.

Nationwide says 2001 ended with the average price increasing by a seasonally adjusted 1.9 per cent in December, compared with a 0.7 increase in November.

Activity levels also ended the year on a high. Sales in October were 140,000, up by 14 per cent from 120,400 in October 2000.

The society says the highest employment levels since 1975, the lowest mortgage rates since the 1950s and the growth in real take-home pay countered the economic upheaval caused by foot and mouth disease and the September 11 US terrorist attacks to help the UK remain resilient.

It predicts that higher unemployment and a weaker economy will slow price growth, with an average rise of 6 per cent estimated for this year, and limit the number of first-time buyers entering the market.

Group economist(finance and planning) Alex Bannister says: “The housing market ended the year with considerable momentum. Strong performances were not just confined to London and the South-east, as has been the case over the last few years. All regions, except Scotland and Northern Ireland, recorded double-digit growth.”

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