House prices rising at fastest rate since 1989

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The Independent Online

House prices jumped again this month to take the annual rate of growth to its highest level since the peak of the previous boom in 1989, according to figures released yesterday.

House prices jumped again this month to take the annual rate of growth to its highest level since the peak of the previous boom in 1989, according to figures released yesterday.

Nationwide building society said the price of an average property rose 2.1 per cent in May to £102,886. This means prices are rising at 17.9 per cent annually.

The society said prices had risen 10 per cent in five months – the same amount as it forecast they would rise in the whole of 2002 one a month ago. The society, which is Britain's fifth largest lender, is now certain to revise upwards its predictions for the year when it reviews its figures next month. This would be the second revision in three months. Alex Bannister, the society's economist, said he could no longer forecast that the market would slow of its own accord.

Separate figures from the Bank of England yesterday showed that 127,000 people took out a total of £5.7bn of new mortgage debt in April – a record in terms of numbers and value. Economists said this showed homebuyers were about to embark on a summer buying spree that would keep prices rising at a rate many believe is unsustainable.

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