House prices rose by an average of £1,400 sterling during November as the market remained firm despite the recent hike in interest rates.
The increase of 1.2 pe r cent is slightly down on the previous month's gain of 2 per cent, when Nationwide Building Society said growth was showing signs of re-accelerating.
But annual house price inflation eased slightly during November, dropping to 15.2 per cent from 16.1 per cent the previous month.
Overall the society expects house prices, which currently average £133,388, to rise by 15 per cent during 2003.
It said house price inflation in northern regions had not slowed as much as it had expected at the start of this year, while in the South East and London, which had seen a slowdown, there had been signs of renewed price growth during the last quarter.
But the society said despite this month's increase in the Bank of England base rate, underlying economic conditions remained favourable to the housing market with mortgage rates still historically low and employment high.
It added that there had also been one-off effects that had brought buyers back to the market, such as a bounce in confidence following the war in Iraq, concerns that there may be a rise in stamp duty in the next Budget and a relaxation of lending criteria by some lenders.