House prices in Britain rose again in August, according to Nationwide building society, which has raised its outlook for full year price growth. UK house prices rose by 1.1pc in August from July, Nationwide said, and were up 16.6pc on a year-on-year basis. The lender has increased its forecast for house price growth in 2003 to 13pc from 10pc, as the current strength in the market is likely to be sustained for a number of months. Prices have increased 8.9pc since the start of the year, the group said.
"Although house price growth is set to slow, the current strength in the market is likely to be sustained for a number of months and we are revising up our forecast for growth during 2003 to 13pc," Nationwide economist Alex Bannister said. He added that prices in the North are primarily behind the new forecast. He also warned mortgage holders that following the release of more positive US economic data, expectations about interest rates have "altered dramatically" and markets are now pricing in a one percentage point rise by September 2004. //www.fxcentre.com