House prices rises 'start to slow'

29 January 2004
House prices rose at their slowest rate in January since April last year, a new survey reveals.

According to the Nationwide, prices rose 0.7 per cent on the previous month were up 14.3 per cent from a year earlier.

Figures from the mortgage lender last month showed a seasonally adjusted 1.5 per cent rise in December and 15.6 per cent rise on the year.

The data will reinforce Bank of England predictions that house price inflation will ease over the next two years as the boom of the past few years slows.

However, the Bank's Monetary Policy Committee (MPC) is still expected to raise rates next week following signs that the economy is strengthening and increasing fears about spiralling levels of personal debt.

The average house price now stands at £134,806.

Alex Bannister, Nationwide's group economist, said: "We expect price growth to ease over the first half of the year, but it is too early to call with any certainty whether the housing market has yet moved into a phase of lower price inflation."

A total of 1.4 million properties were sold during 2003 - the lowest level since 1998.

Alliance & Leicester said last week that it expected the number of people looking to buy a new home in the next 12 months to fall to the lowest level in four years.