THE North is predicted to lead the country's housing market with double-digit growth next year, according to Nationwide.

While the average cost of a property is expected to increase by nine per cent next year, the North, Yorkshire and Humberside are all expected to reach 12 per cent.

But Nationwide said it expected most of the growth to come in the first half of the year, before rising interest rates and weaker income growth dampen confidence.

The figure is slightly higher than the eight per cent nationally predicted by Halifax earlier this week, but significantly lower than the 15 per cent prices are expected to have risen this year, and well down on last year's 25 per cent rise.

Alex Bannister, Nationwide's group economist, said: "The housing market will carry considerable momentum into early 2004 and we expect house price growth to be biased towards the first part of the year.

"House price expectations are also likely to become more realistic, especially in the North, where prices are currently rising at an unsustainable pace."