British house prices rose at their fastest pace in 14 months in October, the Nationwide building society said today, providing further evidence that the country's property boom is hotting up again.
The mortgage lender said house prices jumped by a seasonally adjusted 2 per cent this month, double the rate of September.
This took the annual pace of increase to 16.1 per cent from 15.5 per cent last month, the first rise this year.
The mortgage lender has now raised its forecast for 2003 house price inflation to 15 per cent from the 13 per cent prediction it had made in August.
Expectations of a hike shot up last week after it became known that the BoE's Monetary Policy Committee had come within one vote of a quarter-point rise in borrowing costs from their current 48-year low of 3.5 per cent earlier this month.
Even BoE Governor Mervyn King, who did not back a rate hike this month, warned earlier this month that the continuing strength of the housing market and associated borrowing is exacerbating the risk of a sudden crash in consumer spending.
Nationwide said the average house price rose to £131,947 sterling. That's up around 1,500 pounds on the month - more proof that Britain's housing market is not slowing down as so many economists had predicted just a few months ago.