Estate agent, Felicity J Lord forecast that property prices in central London, which currently average £280,874, will rise by as much as five percent during the first half of 2006, due to record salary levels, shortage in supply and a healthy demand for property.

Darren Box of Felicity J Lord, comments: "The run up to Christmas is commonly a quiet period for the housing industry as people resolve to look for a new home in the new year, however now really is a great time to buy to get ahead of the crowds.

"With record levels of Christmas bonuses expected to find their way into bricks and mortar, we predict a steady rise in prices in the city throughout the first half of the year - by as much as five per cent.

"Confidence is back as asking prices have readjusted over the past 18 months and fear of a crash has diminished."