The figures for the period April to June 2006 show that the annual increase of 7.71 per cent compared to an annual increase of 5.43 per cent for the same period last year.

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Sales in England and Wales were up by 23.76 per cent, compared with the same period in 2005. Sales in Greater London increased by 26.69 per cent.

All economic regions in England and Wales showed an increase in average prices. The North, North West,Yorkshire and Humber and Greater London saw the biggest growth, with the average price in London growing from £293,349 in 2005 to £317,679 in 2006.

And Nationwide Building Society has raised its house price forecast for 2006. “We now expect prices to increase by around 5 per cent, compared with our December forecast of 0 per cent to 3 per cent,” says Fionnuala Earley, Nationwide’s group economist.

“The resiliance of the market so far this year in the face of deteriorating affordability suggests that there is still enough demand in the market to support prices. However, we expect some softening towards the very end of the year, mainly due to affordability, but also reinforced by the surprise increase in interest rates, which can do nothing other than add to caution.”

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