London house prices will grow by just 3 percent next year, according to leading U.K. estate agent Hamptons, which has halved its forecasts for house price growth in the capital in 2015.
This is the latest prediction to suggest that London house prices are finally cooling down, after a couple of years outstripping forecasts. In June, values rose at their slowest pace in 15 months, according to the Royal Institute of Chartered Surveyors.
That followed a record annual increase in London of 20.1 percent in May, according to data from the Office for National Statistics.
At the top of the market in London, prices grew by just 0.3 percent in July, according to estate agent Knight Frank.
"Inconsistent data for the prime central London residential market suggests it is entering a new phase as a general election and rate rise approach", Tom Bill, head of London residential research at Knight Frank, said in a statement.
House prices in the U.K.'s capital are still expected to grow by 15.5 percent in 2014, according to Hamptons, but growth will slow markedly next year to just 3 percent, a fall of 80.6 percent in growth. London's house price growth is also expected to continue to outstrip the rest of the country, with overall growth in England forecast at 8 percent and Wales at 5.5 percent in 2014.
The market is expected to slow next year as mortgage lending becomes more cautious and the country awaits the outcome of May's general election.
- By CNBC's Catherine Boyle