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UK house prices are forecast to continue growing in the next year, albeit at a slower rate, as the market continues to cool down. While concerns surround the 2015 election and the potential base rate rise, though, the Stamp Duty reform is forecast to boost activity, predicts the Royal Institution of Chartered Surveyors.The latest RICs report forecasts that UK house prices will see an average increase of 3 per cent over the course of next year, as the Stamp Duty jumpstart continues demand amid an ongoing lack of supply. Across the UK, RICS expect all parts of the country to see modest price rises during 2015. The South West, Wales and London will experience the lowest rises with prices increasing by 2 per cent and 0 per cent respectively.Indeed, London has seen a significant moderation in 2014. House price grew 13.2 per cent in the 12 months to November 2014, according to Home.co.uk, higher than the rate of growth for average UK house prices (8.9 per cent), but five cities registered faster growth than London in the last quarter: Edinburgh, Glasgow, Southampton, Bristol and Birmingham."We expect the rate of growth to slow to 2 per cent by the end of 2015, dragged lower by a major slowdown in London," comments Home.co.uk.Having outperformed in the early stages of the recovery, chartered surveyors reported London’s housing market was ’pausing for breath’ both in terms of pricing and activity towards the end of 2014. This does, however, mask significantly different behaviour across different parts of the capital and is reflected in the RICS forecast with the eastern boroughs and some other non-prime areas still likely to see more buoyant market conditions persist through 2015.Growth in rental demand softened in the early part of 2014, adds the RICS forecast, as the sales market began to recover across the UK, and potential purchasers took advantage of the Help to Buy scheme. However, enquiries to rent property have begun to pick-up once again and comfortably outstrip new supply of rental property from landlords. As a result, RICS expects rents to continue pushing upwards over the next 12 months, to a 2 per cent increase in rents. The number of sales transactions should also see increase during 2015, moving up to 1.25m (from 1.22m in 2014). "Although there are some concerns about mortgage availability in the wake of the Mortgage Market Review, a firm economy and stamp duty reform should underpin activity levels," comments the RICS."Although this figure represents an improvement on the past few years, to put this in context, in 2006 total transactions stood well above at 1.67m."The main obstacle remains a lack of supply to the housing market. Nonetheless, notes RICS, "we are seeing increasing levels of house building projects underway, and as a result, RICS forecast housing starts to rise to 155,000 in England during the year".This is compared to 125,000 in 2013 and 100,000 in 2012. While this is an encouraging trend, though, the RICs says it is "still insufficient" to address the more rapid growth in population and will leave "significant shortfalls in all tenures".Jeremy Blackburn, RICS Head of UK Policy, highlights how important housing will be in the 2015 election: "The political ambition to meet the UK’s housing deficit of 240,000 means that debates around planning, development and delivery will monopolise the pre-election period in the run up to May 2015. We’ve seen four housing ministers in this Parliament and there is no reason to think that housing won’t continue to be a political football in the next."

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