Prices continued to rise in 2003

The Nationwide's latest figures appear to have proven wrong those pundits who had predicted a sharp correction in prices during the past year.

The North of England did best - up by nearly a third on 2002 followed by Wales up by a quarter.

The survey added that the price of the typical house rose by more than �18,000 to just under �135,000 over the year.

December's rise was stronger than the one seen last month when prices rose 1.2% to stand 15.2% up on the year.

Ups and downs

The study found that 2003 proved to be another strong year for house prices in the north of England, with a rise of 30%. The figure for Wales was 26%.

As a result, average prices in Wales, Yorkshire & Humberside and the North West are now above the �100,000 mark.

Meanwhile, the Outer Metropolitan and London regions saw more modest price rises, with growth of 6% and 7% respectively.

Chesterfield was the area that experienced the biggest year-on-year price rise - up 56% - while Sedgefield and Newcastle upon Tyne were also in the top 10.

On the downside, an annual price fall of 9% was recorded in Surrey Heath while Cambridge and north Devon were among other areas to slip.

But, despite those declines, the Nationwide said prices had not fallen anywhere when combined with the performance in 2002.

However, the Nationwide's group economist, Alex Bannister, said that in 2003 turnover fell to its lowest level since the mid-90s as first-time buyers stayed out of the market.

'Cooling naturally'

He added there were concerns about lack of affordability in and around London and relative absence of first-time buyers.

"Although unpleasant for those affected, the low number of first-time buyers is a sign that the market is cooling naturally," Mr Bannister added.

"We would be concerned to see, as happened in the late eighties, buyers taking on ever increasing amounts of debt in order get onto the property ladder."

Looking ahead, Nationwide said expected house prices to rise 9% during 2004.

But, it warned that most growth was expected during the first half of the coming year, as the momentum already built into the housing market carries over into early 2004.