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Nationwide increases house price inflation forecast

29 August 2003
The Nationwide building society has given homeowners a boost this morning, increasing its house price inflation forecast for the rest of the year.

Nationwide has increased its forecast from a 10 per cent increase for 2003 to 13 per cent in its monthly survey of the housing market.

However, the increase has been driven by the boom in property prices in the north of England.

Rises in the south east and London are expected to be much lower.

Nonetheless, the building society reported another 1 per cent increase in prices for August, on top of a 1 per cent increase for July.

However, the year-on-year increase fell from 17.9 per cent for July 2002 to July 2003 to 16.6. per cent for August 2002 to August 2003.

Nationwide group economist Alex Bannister explained, “The price of a typical house has increased 8.9% since the beginning of the year. Although house-price growth is set to slow, the strength in the market is likely to be sustained for a number of months and we are revising up our forecast for growth to 13% during 2003.”

The boom in the north, Mr Bannister told the Daily Mail newspaper could see the local market “register increases of up to 30 per cent in the year to December”.