The average house price has now risen to £93,231, and despite the continued talk of recession homeowners are remaining relatively confident.
Alex Bannister, group economist at Nationwide, said: "The housing market remains steady going into 2002 with a 0.2 per cent rise in prices in January. Annual house price inflation slipped back to 11.7 per cent, from 13.8 per cent in December, reflecting the strength of the market a year ago.
"Despite pessimistic news from the global economy and the UK manufacturing sector, the housing market is holding up well. The reasons are straightforward, with strong real take home pay and the lowest mortgage rates for 40 years offsetting fears over increased job uncertainty. The number of house sales was 12 per cent up in the year to December and this strength is likely to persist in the short run. This, combined with a surge in remortgaging, has pushed mortgage lending to record levels. Interest rates are close to their trough in this cycle and are set to rise during 2002 leading to higher mortgage rates. With prospects for pay and jobs deteriorating modestly, the housing market will slow during 2002. However, the market looks set to remain robust, with prices expected to rise by 6 per cent."
