London's housing boom is fuelling its own demand, according to the latest London specific housing index.
Evidence from Hometrack's London Demand Index suggests the strong price rises in 2002 have encouraged further demand from buyers who do not wish to be left behind, or who expect more increases.
This March has seen a price rise of 1.8 per cent, following on from a 1.7 per cent jump in February. Overall, 2002 has seen a price rise in London of nearly 4 per cent, according to the index.
London Boroughs have all experienced increases, with Havering, Harrow and City Of London showing the greatest surges. The highest rises tend to be from areas which offer good relative value, or that have close transport links to central London.
Hometrack's housing economist John Wriglesworth says: “Price rises leading to more price rises have not been seen since the late eighties. We have upped our annual forecast for London to 10 per cent from 6 per cent.”