House prices begin to cool

House price inflation is cooling in the UK, meaning that landlords could soon look to expand their portfolio of property comparatively reasonably, a new report suggests.

According to the Royal Institution of Chartered Surveyors (Rics), house price growth eased in June to half the pace of the previous month.

Just 10.6 per cent more of the Rics members reported an increase in house prices than said they dropped in June - compared to 22.5 per cent in May.

Furthermore, the study found that buyer enquires declined at the fastest pace since February 2006, as interest rate increases began to have an effect. This could mean that more people look to rent until house prices come down and affordability improves.

A statement from Rics read: "Four interest rate rises and the prospect of more to come have dented surveyor confidence in the house price outlook."

"Surveyor confidence in the sales outlook almost halved, falling to the lowest level since June 2004."

Based on the Rics figures, the Bank of America said that there was a 20 per cent chance that there would be a house price crash some time during 2008 or 2009.