Strong demand from potential investors and a lack of available properties is driving prices upwards in the London housing market, one expert has claimed.
Speaking on BBC Two's Working Lunch programme, Richard Donnell, director of research at Hometrack, said that demand from the financial services sector and overseas buyers means that London's market is different from others in the UK.
"The lack of supply is a result of higher interest rates, people being worried about interest rates perhaps going up and the fact that a lot of homeowners simply cannot afford to move at the moment without taking quite a large increase of mortgage," he told the programme.
Property prices are being pushed ahead because of this combination of a limited supply and strong demand, he added.
Responding to last week's Budget, Peter Bolton King, chief executive of the National Association of Estate Agents, said that the chancellor had failed to address key issues facing potential homeowners "head on".
Rising house prices and a higher cost of living means many first-time buyers are becoming priced out of the market, he stated.
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