The UK was the only housing market in Europe where house price growth slowed in the second half 2004.

While UK house price inflation is still in double digits, the effect of a series of interest rate rises in late 2003 and early 2004, fed though in the second half of the year, according to a report by the Royal Institution for Chartered Surveyors (RICS).

France, Spain and Ireland had strong markets, with double-digit inflation. Belgium, Italy, Sweden and Portugal were in a group of countries that had inflation between 5% and 8%. Germany appears to be recovering from a long period of stagnancy, with only Austria and Hungary having poor markets in 2003.

The report’s authors argue that 2005 should see continued house price growth in Europe, but warns that market conditions could get dramatically worse at the end of the year.