Nationwide sees house price hope

DIANE COYLE

Economics Correspondent

House prices were flat in January and their annual pace of decline showed signs of levelling out, Nationwide building society said yesterday.

Britain's third-biggest mortgage lender predicted that this year will bring a revival in the housing market, despite recent figures suggesting that mortgage borrowing was weaker in December.

"There are now good grounds for thinking that 1996 will see the beginning of a sustained, albeit modest, recovery," said Philip Williamson, a Nationwide spokesman.

The society's house price index was unchanged between December and January, and last month stood at a level 0.7 per cent lower than a year earlier. This was the best year-on-year figure since last June. In 1995 as a whole prices were 1.2 per cent down on 1994.

On Thursday Halifax building society, the biggest lender, reported that its house price index had climbed by 0.1 per cent in January, leaving house prices 1.2 per cent lower than a year earlier.

Nationwide said that there were already some positive signs of recovery in the market, in more upbeat reports from estate agents and a gradually rising trend in mortgage approvals.