Housing boom to continue in 2007
A booming housing market in the capital will drive Britain's house prices 7% higher next year, according to a new survey published by Nationwide.
The survey forecast house price inflation to run at 7% in 2007, mirroring a similar forecast by the RICS published earlier this week.
"Momentum gathered in 2006 will flow into the early part of 2007, and this will be supported by a buoyant economy, stable interest rates and a continuing shortage of supply," said Fionnuala Earley, Nationwide's group economist.
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Record bonuses being paid in the City are said to be driving the boom in London, while the rest of the South East is also expected to continue rising.
Nationwide added that monthly inflation could well run into double-digit growth early next year.
The mortgage lender previously predicted house price inflation for this year of 5% but its latest indicator showed it running at 9.6% in November.
