June saw a further easing in the housing market, with prices up 0.9% in the month, compared with the average of 1.1% over the previous 3 months. Annual house price inflation slowed to 19%, says the Nationwide Building Society.

Alex Bannister, Nationwide's Group Economist said:

“Price growth was again strongest outside London, with the North East and Yorkshire & Humberside both seeing 30% plus annual inflation rates. The North West and Yorkshire & Humberside also broke through the landmark average property price of £100,000 for the first time.”

“This leaves only the North East, Wales, Scotland and Northern Ireland below £100,000.”

London sees slowest rise in British house prices

London price growth slowed sharply, with annual house price inflation of just 15%. It is likely that weakening pay and job prospects and worsening affordability will reduce annual growth further in London during the rest of the year.

“We continue to expect between 2-5% growth this year in the capital,” continued Bannister.

“In the rest of the South East we expect to see 5-10% growth which would be lower than the Midlands, where 10-15% growth is likely, and the Northern regions, where growth in excess of 15% is possible. These UK and regional averages mask significant variations at local level and across price brackets.”

Owner occupied housing stock worth an estimated £2.5 trillion

An almost doubling of property prices over the last 5 years has meant that UK households own an estimated £2.5 trillion worth of bricks and mortar - with around £1 trillion of that in London and the South East alone. Even relatively young owners in London - e.g. aged 35 - have equity of, on average, around £100-£120,000.

M4 prices drop by £3,600 per mile

House price levels fall significantly as you move outside London.

Although it is only a 41-mile drive along the M4, the price of a typical house in Reading, at just under £190,000, is nearly £150,000 cheaper than a similar property in West London.

This is a saving of more than £3,600 per mile travelled - quite something when it is considered that an annual rail season ticket from Reading to London costs £3,000 compared with an additional £11,000 per annum in mortgage costs required to purchase in London.

House price forecast unchanged at 10% rise in 2003

"A weaker UK labour market will provide a check on house price growth particularly where affordability is stretched,” says Bannister, “However, the next movement in interest rates is still likely to be down and any rise in unemployment looks modest by historical standards.”

“Our forecast for UK price growth remains unchanged at 10% for the year. In contrast, we now foresee a thinner market, with house sales expected to fall by over 10% in 2003 although mortgage levels will remain strong, underpinned by high levels of remortgage activity."