House prices could increase by more than 30 per cent in the next five years, according to a new report from Your Mortgage.co.uk.

By 2010 areas of the UK could see house prices rise by up to 33 per cent. Prices are set to rise by as much as 33 per cent in East Sussex and Eastbourne with increases in Greater London (28.3 per cent), Kent (28.9 per cent) and Oxfordshire (32.7), only a little behind these predicted rises.

Internal to London Newham (43 per cent), Barking and Dagenham (39.9 per cent), and Waltham Forest (34.2 per cent) are set to rise fastest.

The area predicted to grow the least in the next five years is County Durham, where house prices are only set to rise 8.7 per cent.

“The increases we are seeing are in a large part down to the basic economics of supply and demand - demand increases all the time as smaller households and inward immigration swell the adult population,” said Paula John, editor of yourmortgage.co.uk.

“Furthermore, we are not building anywhere like sufficient numbers of new properties and are not likely to do so in the short-to medium-term.

“This is underpinned by an increasingly competitive mortgage market keeping the cost of borrowing relatively low, despite this year?s small increase in the base rate and with the possibility of a further increase this year.

“This broadly positive economic picture will serve to sustain confidence in house prices, which can itself translate into higher asking and offer prices, and the virtuous circle goes on.”

To see predictions for your area, go to www.yourmortgage.co.uk/ppp_default.asp End of story