THE gap between house prices in the North-East and South of England widened in 2001.

According to the Nationwide Building Society, average house prices soared by almost 14 per cent as the economic slowdown failed to dampen consumer confidence.

The society said 2001 was the strongest year of price growth since 1988, with the average property price rising by £11,000 in the 12-month period.

But the gap between house prices in the North and South also widened in 2001, with the difference between the price of a London property and one in the North-East rising 16 per cent from about £94,000 at the end of 2000, to just under £110,000.

Alex Bannister, Nationwide's group economist, said: "In fact prices are so much higher in London that if house prices rise in the next year by our forecast for the UK of six per cent, then for the gap to close by just £1, prices in the North-East must rise by 17.5 per cent."

Last month, the latest regional housing forecast predicted that house prices in some parts of the North-East could rise by 15 per cent this year, but the average was more likely to be about 3.4 per cent.

The Nationwide warned that the rapid pace of increases seen last year was unlikely to be repeated in 2002.

Mr Bannister said: "This year will see higher unemployment and a weaker economy, but the UK should avoid recession. House sales will be held back by fewer first-time buyers and owners trading up."