House prices in Swindon continue to be healthy. But Nationwide has poured cold water on a report in the Times which claimed the building society was predicting a 10 per cent increase in the price of homes in the UK over the next 12 months.

“We released a report saying that prices had gone up 8.6 per cent over the last year,” said Katie Moore, communications manager at the building society.

“We used to give a 12-month forecast about house prices in the past but because the market has been so volatile lately we have stopped these predictions.”

However the content of the report in the Times was regarded as largely correct by leading Swindon estate agents Henry George.

“Without doubt local prices have gone up,” said Robert Skerton, managing director of Henry George.

“It’s difficult to say exactly how much prices have gone up in percentage terms because it all depends on supply demand. We could say for example that houses are probably going up faster in Old Town than they are in West Swindon.

“But the housing market is completely different now compared to the recession of the late 80s early 90s when there was negative equity for more than five years.

“Interest rates were a lot higher then compared to now and while house prices dipped in the last couple of years they have come back a lot quicker.

“The applications on our register – the number of people wanting to buy – is the highest it has been for the last two or three years.

“I think we are in a period of calm where house prices will continue to go in a gentle fashion.”

Martin Gahbauer, Nationwide’s Chief Economist, said that house prices strengthened their upward momentum at the start of 2010, increasing by a seasonally adjusted 1.2 per cent month-on-month in January.

“At £163,481, the average price of a typical UK property cost 8.6 per cent more than a year earlier in January, up from 5.9 per cent in December. 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.”

Mr Gahbauer said over the course of the last month, there were several important pieces of economic news with relevance for the housing market.

“The news that the UK economy finally emerged from recession in the fourth quarter of 2009 was in many ways a mixed bag. Although it is clearly encouraging that economic activity is no longer falling, it remains a long way below the pre-recession level and is not yet growing convincingly.

“Although there may still be some upward revisions to the initial estimates of economic growth, this won’t change the fact that the rebound in the housing market – and particularly house prices – has gone some way beyond the recovery in the overall economy.

“This is a reversal of the picture in 2007-2008, when the housing market deteriorated much more quickly and at an earlier point than the wider economy.”