House price surge takes average home to ?82,188

House prices have risen sharply this month, coinciding with an end-of-year surge in mortgage lending, according to new figures issued yesterday. Nationwide building society said its data showed the housing market was moving forward at a "steady, sustainable pace".

House prices rose by 1.2% during December - the largest monthly rise since April - which means the average property is now worth £82,188, said Nationwide. This is 9.3% higher than a year ago, when the typical price was £75,219.

And new figures show that November saw the largest amount of mortgage lending by the banks since the late summer, with remortgaging reaching record levels as growing numbers of people became aware of the savings they could make by moving their home loan to another lender.

Nationwide said this month's rise was further proof that the summer slowdown was only a pause for breath. A spokesman added that a stable 2001 was in sight, with pay rises and City bonuses likely to give a further boost to an already recovering market. It expects the Bank of England base rate to remain at around 6% for a few months, which should underpin a sustainable market outlook.

Nevertheless, annual house price growth is only forecast to reach 7% in 2001 compared with 9.3% this year and 13.3% in 1999. In London, the region which enjoyed the biggest gains this year, the average home notched up a 13% increase in value in 2000, though the prediction is for a single-digit increase next year.

This year saw the emergence of a number of property "hot spots," and locations where prices surged more than 25% in a year that include Castlereagh, near Belfast (33.3% annual house price inflation), Epping Forest, north-east London (32.8%), and Eastleigh, Hants (27.2%).

Nationwide's predicted hot spots for the next few years include Windsor and Maidenhead, Woking, Cherwell, North Oxfordshire, Stratford-on-Avon, and Winchester and the New Forest, both in Hampshire.