HOUSE price growth is set to fall in 2005, according to Lloyds TSB Bank chief economist Trevor Williams.

Speaking to Kent Business after a seminar at Tonbridge School, Mr Williams said he did not think there would be a collapse of UK house prices but the rate of increase would slow.

Despite figures showing house prices falling in some parts of the country, Mr Williams doubted whether that would happen significantly in a growth area such as Kent.

"I see growth in house prices falling sharply down to between five per cent and zero by the end of 2005," he said.

"But the level of prices won't decline in an area where you have full employment and big projects going on. There will continue to be demand for housing in this area."

As for interest rates, he thought, in common with several other economists, that they had not necessarily peaked.

"We haven't hit the peak just yet, but in order for inflation to stay on target, there seems to be one more increase in rates.

"Then I think they may stay flat for a while, with a chance they may be cut at the end of the year if growth is below 2.5 per cent."

Bill Pike, of Lloyds TSB Bank, said the situation in the county was good. Businesses were starting to look at investing again.

He said: "We are looking to support that as well as we can. It's a nice time to be working in Kent."