House prices continued to rise in February in spite of the January interest rate rise, taking the average cost of a home to £174,706, Nationwide has announced.
The 0.7 per cent price rise elevated annual house price inflation for the month into double figures at 10.2 per cent.
But Nationwide chief economist Fionnuala Earley was sanguine about the ongoing rise in prices, pointing to constrained supply and resilient demand in the buy-to-let market.
Over the latter half of the year, the building society expects higher interest rates and affordability constraints to clamp down on demand, she said.
"By the second half of 2007, we continue to expect to see a more pronounced slowdown in the annual rate of house price growth," Ms Earley remarked.
A further, final base rate rise from the Bank of England "could still be on the cards" to trigger the "more pronounced slowdown" predicted for the second half of 2007, she added.
The typical house is now £16,000 more expensive than at this time last year and increasing in price by £40 with every day that goes by, according to Nationwide statistics.To learn more about UK property, click here.
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