The millennium will see house prices outstripping retail inflation, according to the Halifax.
The bank is forecasting house price inflation of 8 per cent during 2000, driven by the prices remaining “affordable”.
It also expects Bank of England base rates to rise from 5.5 per cent to 6.5 per cent by the end of 2000.
Halifax head of group planning and economics Gary Styles says: “Whilst house price inflation is at its highest for a decade, the pick-up in prices this year does not mark the beginning of a runaway housing boom.
“Nonetheless, house prices are expected to continue to outstrip retail price inflation by a significant margin.”