House price growth remained strong during January according to the latest survey from the Nationwide building society.

Prices rose by 1.7% during the month leaving the average price of a home at �117,905.

The annual growth rate increased slightly to 26.5% from 25.3% in December, although the Nationwide said this was due to smaller price rises a year ago.

But the society said it expected price growth to begin to ease later this year.

Market slowing?

Recent house price surveys have suggested that the UK housing boom is finally coming to an end.

Earlier this week, the latest survey from property website Hometrack found that house prices rose only fractionally in January.

The small increase was put down to falls at the top end of the market, especially in London and parts of the South East of England.

And the Royal Institution of Chartered Surveyors reported earlier this month that price rises had slowed for the third month in a row in December.

Steady... for now

But the Nationwide said it would be a few months before annual house price inflation fell significantly.

"With the current trend in growth very stable and strong we would expect the annual inflation rate to remain around 25% for the next couple of months," said Nationwide's group economist Alex Bannister.

"However, in the six months between April and September last year house prices rose by a cumulative 15.5%, or an annualised rate of 33%.

"We do not expect to see this strength repeated this year and the annual rate of inflation should decline significantly over this period."

Protection

Nationwide noted that if house prices actually began to fall, homeowners were in a much better position to cope than in the past.

This was because house buyers are tending to put down bigger deposits when buying property.

In 1989 nearly 300,000 first-time buyers - almost half the total - put down a deposit of 5% or less, and of these 150,000 paid no deposit at all.

Last year only about 125,000 first-time buyers paid a deposit of 5% or less.

The Nationwide said there were three key risks to the housing market - a sharp rise in interest rates, a significant increase in unemployment or a large fall in consumer confidence.

While it noted that a war in Iraq could hit confidence, it said sentiment should remain "robust" while unemployment continued to fall and the chance of a big rate rise was small.