RISING house prices throughout Wales cannot continue in 2003 according to a new survey by the Principality Building Society.

Last year house prices in Newport rose by 13.6 per cent to reach an average £80,193. In Cardiff prices rose 19.5 per cent to an average £109,769.

The average increase across Wales was 16.8 per cent but according to the Principality's chief executive Peter Griffiths this cannot be sustained.

"I would caution home-owners against the expectation that double-digit house price growth will continue," he said.

Mr Griffiths attributed last year's rises to low interest rates and high levels of employment. He added: "With base rates at four per cent it allowed lenders to offer very attractive mortgage products."

Peter Alan, the Principality's estate agent subsidiary, reported house price "hot spots" in Newport, Cardiff and Swansea.

And he said these rises had a knock-on effect on prices in travel-to-work areas such as Cwmbran and Pontypridd.

But house prices in 2003 will depend on the strength of the UK economy and the confidence buyers have in it, Mr Griffiths warned.

He believes interest rates will not rise significantly because the UK government will not want to make things even more difficult for the struggling manufacturing sector.