House prices rose by 0.2 per cent during January as consumer confidence remained strong despite bad global economic news.
The increase lifted the average price of a property to £93,231 - 11.7 per cent higher than the same month in 2001, Nationwide said.
But the building society said a rise in unemployment would slow the market down during 2002 and it expects prices to grow by just six per cent during the year.
It said the annual rate of house price inflation had already fallen more than 2 per cent compared with December's rate of 13.8 per cent.
Alex Bannister, Nationwide's group economist, said: "Despite pessimistic news from the global economy and the UK manufacturing sector, the housing market is holding up well.
"The reasons are straightforward, with strong real take-home pay and the lowest mortgage rates for 40 years offsetting fears over increased job uncertainty."
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