Britain is no longer top of the European League of house price inflation, according to The Royal Institution of Chartered Surveyors (RICS)s.

While much of Europes housing markets continued to flourish in 2004, the UK market has been pegged back due to consecutive rises in interest rates. France is now top of Europes house price inflation table, following 15.5% gains last year. Spain fell to second place, while Britain is in third. The Netherlands, Switzerland, Germany and Austria occupy the lower end of the table, while Greece, where prices fell 4%, is bottom.

Milan Khatri, an RICS economist, said: "Low interest rates have been the principal driver of rising house prices in many countries, despite some quite moderate economic performances. Any sustained increase in interest rates takes the steam out of markets, as seen in the UK over the last year."