Spanish house price inflation will slow sharply next year as a glut of new supply hits the market, a report has predicted. The Times

Property consultancy RR de Acuña & Asociados has found that Spain has built 1 million homes more than it needs over the past three years, causing a national oversupply.

As demand slackens, it forecasts that prices will rise by only 4% in 2008, down from an 11% surge in 2006.

RR de Acuña predicts prices rises of 5% to 7% this year.