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LONDON-UK house prices soared 2.8% in September, the highest monthly increase since June 1993. The country’s biggest building society Nationwide reports that the price of the average UK home was, at £92,432, ($136,800), 15% higher last month than in September 2000. In addition, Separate figures released by the Bank of England showed mortgage lending hit a record £5.05 billion (7.47 billion) in August.

Nationwide researchers are not calling what impact the terrorist attacks on the USA will have on the UK residential property market. Nationwide’s group economist Alex Bannister expects some impact but predicts it will be mitigated by falling interest rates. He left his forecast for house price growth for 2001 unchanged at 11%.

Residential property broker Chesterton expects prices to moderate as the market slows. ‘Some Chesterton offices have reported purchasers exercising more caution’ said Peter Chapman, Managing Director of Chesterton Residential, ‘but the limited stock available is expected to prevent a weakening of prices, particularly in central areas.

‘Following the US attacks Chesterton agents have noticed that the number of new applicants looking for property has fallen significantly. However, most of these have been ‘lookers’ rather than serious buyers so hopefully this won’t impact too significantly.’

Generally many corporate clients remain and rents are continuing to rise. The residential development department too is holding up well with 2001 expected to be another good year in central and inner London.

Buy-to-let, a strong sector in the London residential market, could be hit hardest. Rowena Wild, Executive Director of Chesterton Residential Lettings says; ‘With the stock market in the state that it is property remains an attractive investment opportunity. However, with the potential risk of rental voids and reduction in yields which may follow in the wake of the US attacks landlords thinking of investing should have capital or funds to support the investment over this period.’

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