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Rapid rise in house prices points to economic confidence

House prices rose at the highest rate for five months in January and consumer confidence rose more than expected.


The Nationwide building society said house prices rose by 1.2% per cent this month, more than twice the 0.5% gain seen in December and the biggest advance since August.

The market had forecast a 0.3% rise on the month.

It took annual house price inflation to 8.6% from 5.9% last month, the highest since October 2007 and following double-digit declines in many months last year.

"Unless there is a fall in property values in February, annual house price inflation is likely to move into double-digit territory next month for the first time since May 2007," said Martin Gahbauer, Nationwide's chief economist.

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