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Property investment in Spain and France grows more attractive

31 January 2005
Property values in the UK are now growing at a slower rate than those in France and Spain, a new pan-European survey has found.

The UK, along with Ireland, was the fastest growing property market in Europe last year, but has now slipped to third.

The Royal Institution of Chartered Surveyors' European Housing Market Review found France had the biggest gains with a 15.5 per cent average rise in the cost of a home, a little ahead of Spain.

"Low interest rates have been the principal driver of rising house prices in many countries, despite some quite moderate economic performances," RICS economist Milan Khatri said.

"Any sustained increase in interest rates takes the steam out of markets, as seen in the UK over the last year.

"As the only country to have experienced significant interest rate rises in 2004, the UK's slowdown is likely to lower Britain's house price inflation rate even further."

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