THE property industry rounded on Nationwide last night, accusing the building society of “irresponsibly” releasing figures showing another leap in house prices.

Estate agents dismissed the 2.1 per cent jump in property prices reported by Nationwide as unrepresentative of the market, while housebuilders were also quick to criticise the mortgage lender.

Nationwide, however, stood by its figures, and said there were valid reasons why its price survey did not chime with the softening in market sentiment seen in recent weeks. The 2.1 per cent leap in property prices seen during July was the largest monthly rise for five months and was interpreted by Nationwide as a reacceleration of house price inflation.

The house price jump, together with new figures showing that the UK consumer debt had breached £1 trillion, makes an interest-rate rise next week all but certain, analysts said.

But estate agents reacted furiously to the suggestion that the unexpected leap in the Nationwide house price survey may have tipped the balance in favour of higher rates, saying that the building society was not reflecting the true nature of the market.

Paul Smith, chief executive of Spicerhaart, a countrywide estate agency chain, said: “When I saw the Nationwide numbers I thought ‘these aren’t real.’ I do think it’s irresponsible. We’re at a time when we’ve a very sensitive Bank of England which is making rate decisions based on numbers like these.”

Ed Mead, director of Douglas and Gordon, the London estate agency, said: “The Nationwide and Halifax figures always seem to be at odds with what people are saying. I’m very cynical about both surveys.”

The House Builders Federation also said that the Nationwide data did not reflect the experience of its members.

However, Alex Bannister, Nationwide’s chief economist, said: “The numbers are what they are and we certainly don’t tamper with them.

“We’ve had several incidences in the past of sentiment being very weak and that has not translated very quickly, if at all, into the hard data.”

He said there were various reasons why the Nationwide figures could differ from estate agent sentiment. “I’m not saying that the slowdown’s not going to happen. But I am saying that the jury’s out”.

CRASH 'NOT A DISASTER'

House prices may be overvalued by as much as 30 per cent but a market crash need not derail the economy or trigger a recession, the National Institute of Economic and Social Research said yesterday.

In its latest quarterly analysis, the institute said that if the overvaluation in the housing market was wiped out over four years — as happened in the mid-Seventies and early Nineties — the impact on the economy would be limited. Even if prices now fell by about a third from present levels, the institute’s projections show that this would cut growth by a relatively modest average of only 0.25 of a percentage point in each year.