Forum Brief: House prices

House prices are rising at their fastest annual rate in 13 years, according to a new report.

According to the survey, from the Nationwide building society, house prices rose by 21 per cent in the year to July - the biggest annual increase since the second quarter of 1989.

Forum Response: National Association of Estate Agents

Hugh Dunsmore-Hardy, chief executive of the NAEA, told ePolitix.com: "There are other factors to consider, namely market trends such as the applicant enquiries and viewings. Our own view is that the market is heading for 'calmer waters' during the late summer and autumn months.

"Added to that we have noted a fall in first time buyer activity which reflects on the affordability issue and also employment concerns, particularly in the banking and financial services sectors."

Forum Response: Council of Mortgage Lenders

A spokeswoman for the Council of Mortgage Lenders told ePolitix.com: "The CML has recent revised its forecasts for the housing market, which continues to outperform expectations. We now expect average annual house price inflation of 16 per cent in 2002.

"This suggests only a very modest slowdown in quarter-on-quarter growth between now and the end of the year. However, we expect house price growth to slow more substantially in 2003 as the Bank of England's monetary policy committee responds to better prospects in other parts of the UK economy by raising base rates to a peak of 5.5 per cent by the late summer."