Market Slowdown Stalls

Thursday, July 29 2004

Nationwide has reported further increases in house price inflation this month, as the property market refuses to slow down.

The average house price increased by 2.1% in July, compared with just 0.9% in June, thanks to a strong economy, Nationwide has reported. Its average house price now stands at £154,299, with prices rising fastest in Scotland, the North and Wales.

The mortgage lender?s results stand in stark contrast to those released by Hometrack, the independent property research company, earlier this week. Hometrack reported a fall in prices of ?0.1%.

Alex Bannister, Nationwide?s Group Economist, hinted that as UK homes had already risen by 12% so far this year, their forecast of 15% is likely to be reviewed over the next few months.

However, he also pointed out that, as house prices are high relative to equity prices, the market may still slow: ?a slowdown in the housing market is inevitable and those expecting recent capital gains on property to persist are likely to be disappointed,? he said.

Mr Bannister reassured homeowners that as due to the positive outlook, a nineties style crash should be avoided: ?The most likely conclusion to the current housing market cycle remains a drawn out period of low price growth.?