He added “Bonus payments in the city have ensured that there are people out there willing and able to pay higher prices. While there is still fierce competition to purchase property coupled with a distinct lack of property for sale, the rising prices reverberate to all corners of London and greater London. While the city and the rest of the capital continue to provide the highest percentage of jobs in the country, it is inevitable that property situated in and around London are going to be sought after”.

Prices have not fallen in London now for over 15 years and that trend looks set to continue thus forcing London more into a property hotspot and causing more hardship for first-time buyers and people already struggling with bills, mortgages and credit card debts.

The Bank Of England recently raised interest rates a quarter of one percent to 5.25% and it is estimated that the increase will put an average of £40 on to mortgage borrowers monthly fee. Although some money experts say that it is unlikely that the Bank Of England will raise interest rates again at the next quarterly stage, many experts are predicting that the latest ¼% increase is not enough to curb the current property boom and interest rates will have to be raised again in the near future.

Some reports claim that prime central London property prices grew by a staggering 28.6% during 2006, the highest rate of growth since June 1979. Monthly price growth in December was 2.6%.

Price growth has been underpinned by two elements: low supply and bonus fuelled demand.

Property expert Michael O'Flynn of FindaProperty.com, says: "The prime London market has been booming for the past year and that looks set to continue in the next few months as bonus money from the City floods the market.

"The London market is now governed by its own logic   - City money, overseas money, strong demand and limited supply all combine to keep the pressure on prices. If rates rise again, we would expect to see the general market cooling in the capital, but at the top end the shortage of properties is so acute, and the demand so high, that it is unlikely to have much of an impact." 

Launched in 1997, FindaProperty.com is a one-stop shop for house-hunters and one of the leading property websites in the UK.

The Bank Of England reconvene in 3 months time to review interest rates again. If they rise again even by one quarter of one percent, it will have a significant effect on today’s property market. There have already been stark warnings to people to be wary of over-stretching themselves financially.