On December 6th the Halifax and Nationwide Residential Indiceswere showing that increases in the UK property prices werecontinuing to rise; in November the reported increase had been2.1%. Yet data from Hamptons' network of branches covering London,the South and West Country reveals that in these regions the markethad started to fall from as early as May. Vendors will thereforeremain confused until the residential indices are split intogeographic regions across the country.

Paterson believes that prices will fall by between 5% and 10%between January and June 2003, with the market then levelling offand there being a 2% to 3% increase in the second half of theyear.

Estate agent Knight Frank says that we are now living in a twotier market that could not have been predicted even a year ago.Property prices above £1 million ($1.6 million), particularly inthe country house market in the South East, are faltering, whilemiddle range properties continue to sell reasonably well, driven bycontinued low interest rates and a low level of unemployment.Overall the market appears to be regionalising and is increasinglyrelative to local rather than national economic factors. Areas likeWorcestershire, Gloucestershire and Suffolk are doing well.