Britain's Nationwide Building Society predicted rising house prices next year after the UK's biggest customer-owned lender posted record first-half profit due to a boom in mortgage business.
Nationwide will release its detailed forecast for 2005 later this month, but Commercial and Treasury Director Stuart Bernau said that the society believed prices would rise by up to 5% and would not fall.
'We believe it will bump along in a slightly positive way but more neutral,' Bernau said. 'We don't believe there is going to be a crash, but there has been a change in the market.'
Nationwide's pre-tax profit rose 30% to a record £244.9m sterling in the six months ended on October 4 from a year earlier as it boosted mortgages, personal loans and credit cards.
British house prices have shown double-digit inflation since the late 1990s, which has more than doubled the average price of a home. They are a closely watched indicator in a country where two thirds of households are home-owners.
Nationwide's comments on the outlook were more upbeat than those of the Bank of England, which this month altered its view to say property prices would fall modestly, having said previously that house price inflation would slow to zero.
The Bank of England has increased interest rates five times in a year, partly to damp the property boom.
House prices fell at their sharpest rate since the recession of the early 1990s in the three months to October, the Royal Institution of Chartered Surveyors said yesterday.
