[LONDON] British house price growth is expected to slow next year as tighter mortgage rules and affordability constraints continue to bite in much of the country, the Royal Institution of Chartered Surveyors (RICS) said on Friday.
RICS members forecast that house prices would rise by 3 per cent next year on average, with increases of as much as 5 per cent in much of northern and central England but stagnant prices in London, the location of 2014's biggest price rises.
Data from mortgage lender Nationwide shows that house prices rose by 8.5 per cent in the 12 months to October, suggesting that the forecast RICS made a year ago for 8 per cent price growth in 2014 may prove to be fairly close to the mark.
Housing market activity has been slowing since the middle of the year, owing to new regulations that force lenders to make tougher checks on whether borrowers can afford their loans.
However, a decision this month by finance minister George Osborne to cut transaction taxes on most property purchases may boost demand in 2015, RICS said. "The recently announced and long overdue reform of stamp duty is likely to provide a tonic for the market across many parts of the country, particularly for first-time buyers," Simon Rubinsohn, the RICS chief economist, said. "That said, the bigger affordability issue is not going to go away, highlighting just how important it is to speed up the supply pipeline of new homes over the coming years."