LONDON, Dec 23 - Britain's red-hot housing market is likely to cool a bit next year due to higher interest rates, with price rises expected to slow to six percent, the Royal Institution of Chartered Surveyors said on Tuesday. The figure is half the 11 percent rise that RICS has expected for this year. The forecasts are based on the Government's new monthly house price index. But with no signs of recession or a significant hike in interest rates on the horizon, those who expect to buy a house on its way down might be waiting in vain as house price falls are very unlikely in 2004, it said. "The question on everyone's lips is will the housing market crash next year -- our response is no but, as always, this will depend on the continuing strength of the overall economy and low interest rates," said Milan Khatri, RICS chief economist.
The Bank of England raised borrowing costs by a quarter point in November for the first time in almost four years, partly because of concerns about rising consumer debt and the bubbly housing market. Strong regional variations are likely to continue, with London market and other southern region's price increases remaining subdued at 5.0 percent, and northern regions continuing to rise by over 10 percent, RICS said. But a lack of availability of properties coming into the market will exert upward pressure on prices in the first half of 2004. Demand for houses is likely to remain high due to the buoyant economy, it said.//www.s.com