Part II - Read Part I here...

The London Housing Federation, working with analysts at the Oxford Economic Forecasting, recently predicted that London house prices may increase by as much as 34%, reaching £400,000 by 2011, an increase of around 7% a year from its current level of just under £300,000, writes David Lawrenson.

Meanwhile, by 2011 the average London wage will be just over £40,000 (it is now about £33,000).

This increase, if it happens, will merely extend the extent to which house prices have beaten wages over the last 10 years - they went up by about 140% since 1997, while salaries have increased by around 35%.

And one of the main factors behind this is increases in the population - expected to be as much as 800,000 in London in the next five years - combined with a lack of housing supply.