Market Stays Afloat

House prices increased by 1% during November, according to Nationwide.

The mortgage lender?s latest house price survey showed that although activity is still down, with the Bank of England reporting the lowest mortgage approval numbers since January 2000, the average property increased in value to £153,439 over the month.

The property market has performed better over 2004 than Nationwide initially anticipated at the end of last year, when they predicted that prices would rise by 9%. It now looks as if prices will end 2004 up by around 13-14%.

However, 2004 has been a year of two distinct parts, the lender said, with prices rising by almost 12% over the seven months to July but only 1-2% over the remainder of the year.

In spite of this month?s increase in prices, Nationwide expects growth next year, but at a subdued rate, with prices forecast to rise 2% in the year to December 2005, compared with around 13% this year and 16% in 2003.

Alex Bannister, Nationwide?s Group Economist, said: ?The combination of higher interest rates, higher price inflation, subdued take-home pay growth, higher debt levels and rising energy prices are likely to lead to a gentle breaking of house price growth as opposed to a full-scale emergency stop.?